Boss spends big as investors sweat over lost millionsArticle...

Boss spends big as investors sweat over lost millionsArticle from: PerthNowFont size: Decrease Increase Email article: Email Print article: Print Submit comment: Submit comment Michael Bennet

July 04, 2009 06:00pm
THE WA founder of failed agribusiness Great Southern is putting the finishing touches to a multimillion-dollar waterside mansion in Mandurah _ as investors wait on news of $1.8 billion they stand to lose.

Great Southern collapsed in May with debts of more than $800 million.

The company was the subject of a Senate inquiry this week in Perth that heard founder and former chief executive John Young withheld details of losses from investors and the board before selling $32.5 million worth of shares in February 2005.

Now Mr Young is moving ahead with a $3.5 million home with its own boat pen in the exclusive Amity Cove area of Halls Head.

Public records show the canal property is owned by Latitude Holding, the holding company of Mr Young's Carlton Family Trust. Mr Young's middle name is Carlton.

An estate agent specialising in the area who did not want to be named put the value of the property at between $3.5 million and $3.8 million.

Mr Young also owns a multimillion-dollar mansion less than a kilometre from the ocean at City Beach.

Despite the failure of his company Mr Young has fared better than most investors and received a $2 million golden handshake when he retired as chief executive in February last year.

Mr Young was a non-executive director at Great Southern when the company was swept into administration in May owing more than 40,000 investors about $1.8 billion.

Mr Young did not return calls from The Sunday Times.

He had ambitions to become Australia's first agribusiness billionaire _ and to feed the world.

He was awash with cash as urban investors supported his company on the back of generous tax breaks introduced by the Howard government.

But that was at the peak of the economic boom. Come the financial crisis and Great Southern collapsed under huge debts.

Mr Young's 17 per cent holding was valued at $200 million as little as three years ago. But by the time Great Southern's shares were suspended last month, it had sunk to less than $10 million.

Now it's worthless.

Financial advisers who sold the company's schemes said it held big sales conferences and took them on regular trips to view plantations.

The sales pitch was simple. According to a report in The Australian Financial Review, one recalled: ``They said you'd put in $5000, get an up-front tax break and in 10 years time you'd get back $10,000, which would fund your kids' education.''

But years later, when the forests and olive groves were ready to harvest, the returns were often well below original forecasts, often because of drought.

But high management fees still had to be paid regularly.

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