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I think most if not all of these shares have been sold without any effect on the sp


Track legend faces $20m Opes loss

Kevin Andrusiak | April 05, 2008
OLYMPIC hero Herb Elliott faces the loss of half of his $40million fortune, becoming the highest-profile casualty of the Opes Prime collapse.

The Weekend Australian understands that Mr Elliott has lost control of about half of his 5.5million shares in would-be iron ore producer Fortescue Metals Group, founded by Australia's richest man, Andrew Forrest.

The shares, worth about $20million, are now in the hands of the banks behind stockbroker Opes. The banks are liquidating a $1.3billion portfolio of about 600 stocks to recover their loans to Opes.

Mr Elliott, the former Olympian who is now chairman of Fortescue, could not be contacted for comment yesterday but it is believed he offered the shares to Opes as collateral for a loan he used to exercise options over Fortescue stock.

Fellow Fortescue board member and chief operating officer Graeme Rowley has also been caught up in the Opes collapse.

However, Mr Rowley faces the prospect of losing a much smaller portion of his stake in the company. He is understood to have used 720,000 Fortescue shares -- worth $5million -- as collateral for a loan with Opes.

Opes went into receivership on Thursday last week amid allegations of financial irregularities, with ANZ and investment bank Merrill Lynch taking control of shares Opes clients had bought with margin loans offered by the firm. ANZ and Merrill are selling the stock to recoup their combined $1billion-plus loan to Opes, the first Australian broker to collapse in more than a decade.

Mr Rowley and Mr Elliott have been left in the dark as to whether the shares have already been sold, but are believed to be prepared to use any avenue to get them back.

The Weekend Australian also understands that Mr Forrest has no exposure to Opes through his personal stake of 1billion shares in Fortescue, worth $7billion.

Sydney lawyer-turned-investor Chris Murphy has reportedly lost most of his $140million share fortune in the Opes collapse.

It is a cruel blow for Mr Rowley and Mr Elliott, who have been at the forefront of building Fortescue into a $20billion mining house, which is on the verge of breaking the iron ore duopoly in the West Australian Pilbara held by BHP Billiton and Rio Tinto.

The company is weeks away from delivering its first iron ore shipment to Chinese customers.

But their exposure also confirms that very few in the mining industry are not in some way connected to the Opes collapse.

There are fears the sellers of the shares seized by ANZ have targeted rival mining companies to sell the stock.

Melbourne-based Copper Strike said attempts to contact ANZ and the receiver of Opes, Deloitte, to find out how many of its shares were potentially up for sale have been unsuccessful. "We have been advised to submit our request by email, which we have done several times, and this has bounced," company director David Ogg said.