Small investors pay a huge price for NuCoalMARK COULTANTHE...

Small investors pay a huge price for NuCoal
MARK COULTAN
THE AUSTRALIAN
JANUARY 24, 2014 12:00AM
GARY Sparkes' life is light years away from the murky world of coal exploration licences, Labor Party backroom deals and the hearing room of the Independent Commission against Corruption.

He's the national business development manager for Actron Air Conditioning and, at 62, Mr Sparkes was looking to retire in a few years, but his plans have just changed.

Mr Sparkes has been caught up in the imbroglio because he decided to buy shares in NuCoal Resources for his self-managed super fund.

His broker recommended NuCoal as a buy. Mr Sparkes did his research, read the original prospectus, looked at the company's data, and decided to invest $33,000, about one-third of his superannuation portfolio.

NuCoal had bought the exploration lease by taking over Doyles Creek Mining, a company whose chairman was former mining union boss John Maitland, for $94 million.

Mr Sparkes hung on to the shares even when ICAC began its inquiry into how Maitland and his associates managed to get the exploration licence without a tender.


Mr Sparkes was comforted by the words of NSW Premier Barry O'Farrell in 2012, who said: "The innocent parties here are both the landowners and also NuCoal."

But he received a shock this week when Mr O'Farrell announced the licence for Doyles Creek would be cancelled, without compensation. Suddenly, NuCoal Resources was worth almost nothing.

Asked about the innocent shareholders in the coal companies, Mr O'Farrell said: "Any investment on the stock market is speculative, full stop."

Mr Sparkes says that comment is out of touch.

"This is my super fund, and they have wiped a third of it out," he said.

"Instead of retiring in two or three years' time when I am able to, and letting some younger person come through and take my job I can't do it now, I am just going to have to keep working. I'll work until I drop dead, I suppose."

The decision to cancel the licences without compensation has affected 3500 shareholders in NuCoal, a listed company on the Australian Stock Exchange.

Another shareholder is Darrell Lantry, who had several hundred thousand dollars invested in NuCoal.

Mr Lantry said that 80 per cent of his personal investments were tied up in NuCoal, and about one-quarter of his self-managed super fund.

A sales manager, he described himself as an ordinary person, not rich. Like Mr Sparkes, Mr Lantry did his due diligence, including reading the prospectus and notifications to the ASX, before investing.

Asked about the premier's comments that stock market investment was speculative, he said: "I would say to him; it's speculative investing in the market with the price of coal going up and down, but not an asset, a coal licence, being taken away.

"Where does that leave investors here in Australia?

"I'm not trying to play the violins but how can you get more innocent than this?"