An Australian Mirage
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An Australian Mirage Author Hoyte, Catherine Published 2004 Thesis Type Thesis (PhD Doctorate) School School of Arts, Media and Culture DOI https://doi.org/10.25904/1912/1870 Copyright Statement The author owns the copyright in this thesis, unless stated otherwise. Downloaded from http://hdl.handle.net/10072/367545 Griffith Research Online https://research-repository.griffith.edu.au AN AUSTRALIAN MIRAGE by Catherine Ann Hoyte BA(Hons.) This thesis is submitted in fulfilment of the requirements of the degree of Doctor of Philosophy. Griffith University Faculty of Arts School of Arts, Media and Culture August 2003 Statement of Authorship This work has never been previously submitted for a degree or diploma in any university. To the best of my knowledge and belief, this dissertation contains no material previously published or written by another person except where due reference is made in the dissertation itself. Abstract This thesis contains a detailed academic analysis of the complete rise and fall of Christopher Skase and his Qintex group mirage. It uses David Harvey’s ‘Condition of Postmodernity’ to locate the collapse within the Australian political economic context of the period (1974-1989). It does so in order to answer questions about why and how the mirage developed, why and how it failed, and why Skase became the scapegoat for the Australian corporate excesses of the 1980s. I take a multi-disciplinary approach and consider corporate collapse, corporate regulation and the role of accounting, and corporate deviance. Acknowledgments I am very grateful to my principal supervisor, Dr Anthony B. van Fossen, for his inspiration, advice, direction, guidance, and unfailing encouragement throughout the course of this study; and for suggesting Qintex as a case study. I thank my second supervisors, Dr George Lafferty, and Dr Jacques Bierling, for their guidance and support during Dr van Fossen’s temporary absences. I thank Mr. Jack Gleeson, former chairman of Television North Queensland. I thank especially my friend Dr Sarah T. Rickson for her helpful advice and support. I thank my friend Carole Carr for her assistance, and calming influence in the final collation of this thesis. I thank my children, Geoffrey, Margot, Stephen, and Pamela for their support and forbearance. I thank my late husband Duncan for his unstinting tolerance, support, and understanding in the early part of this work, despite a debilitating illness. Table of contents Glossary i Introduction 1 1. Context 8 2. Corporate Collapse and Regulation 33 Corporate collapse 33 Corporate regulation 50 The role of accounting 65 3. Deviance 89 Dimensions of corporate deviance 89 The role of the state 97 4. The First Ten Years 109 5. Resorts and Tourism 152 6 Media 185 7. The Mirage’s Last Year 223 8. The Twelve Year Finale 284 Conclusion 351 Appendix 1 Brief History 354 Appendix 2 Capital Growth and Expansion 373 Appendix 3 Reported Qintex Debt Facilities 384 Appendix 4 Powditch Report 393 Appendix 5 Supplementary Powditch Report 400 Appendix 6 QGMS items sold at auction 403 Bibliography 404 Figures and Tables Figure 1.1 All ordinaries index 1970-1990 26 Figure 2.1 Qintex Group structure February 1989 46 Figure 3.1 Apparent ownership of QMH November 1989 95 Figure 8.1 Qintex television ownership late 1989 290 Table 1.1 Comparing Australian GDP and added value 1960-1989 11 Table 1.2 Major bank exposure to Qintex Australia 20 Table 4.1 Qintex Ltd Accounts 1983 123 Table 4.2 Shareholdings in Hardy Brothers (Group) Ltd at 31 July 1983 124 Table 4.3 Preference shareholders in IPH Investments Pty Ltd 1983 131 Table 6.1 The Fairfax equation 202 Table 6.2 Group debt 202 Table 7.1 Qintex Australia financial position 226 Table 7.2 Distribution of fees paid to QGMS 266 Table 8.1 Book value of television stations at the time of the collapse 289 Table 8.2 Intra-company debt 292 Table 8.3 Skase’s debts 304 Table 8.4 Skase’s acknowledged assets 305 Glossary ASIC Australian Securities and investment Commission. AARF Australian Accounting Research Foundation. The rule drafting body for the ICAA and the ASA. ABT Australian Broadcasting Tribunal. Adorno* Paul Adorno. Pixie Skase's Melbourne hairdresser who established a Gold Coast branch at Marina Mirage. AEFC Australian European Finance Corporation. AFR The Australian Financial Review ANZ Trustees ANZ Executors and Trustee Company Ltd. Arbreau Formerly Queensland Merchant Holdings. ASA Australian Society of Accountants. ASC Australian Securities Commission. ASRB Accounting Standards Review Board. ASX Australian Stock Exchange. ATC Australian Tourism Commission. ATN Australian Television Network (formerly the 7 Network). Bosch, Henry Second and last chairman of the NCSC (1985-1990). Braham† Dudley Braham, former deputy chairman Hardy Brothers. He remained on the Qintex board until 1989. In 1982 he resigned from the board and publicly attacked Skase over the attempted takeover of Nettlefolds, he rejoined the board a few months later, when Qintex dropped the attempted takeover.1 Brooks, Desmond Architect, who designed the two Mirage resorts. Joined Hawaiian-based Media Five Ltd as a director and partner. He was later part of a joint Australia venture Media Five, which terminated in 1985, with Brooks keeping the name until 1988. In January 1990 a Hawaiian court issued a judgement against Brooks continued use of the name.2 BRW Business Review Weekly Burden Peter Burden, Melbourne Lawyer, The group's deputy chiarman. Shareholder/Director of QGMS. CALDB Companies Auditors and Liquidators Disciplinary Board. Campbell, Bob Chief executive of QAL's media and entertainment arm. Shareholder in QGMS. Capps Richard Capps group treasurer.3 CEO Chief Executive Officer. CM Courier Mail CRUST Contingent Residuall Undated Sobordinated Tranches. CSLRC Companies and Securities law Review Committee. Curtis* Ian Curtis, married to Pixie's Skase's sister, Di. Followed the Skases to Brisbane. General Manager Qintex 1981-1988. DACP Discretionary Accounting Policy changes. 1 Sydney Morning Herald 14 November 1987:81. 2 Coourier Mail 3 September 1991:24. 3 Australian Fiuancial Review 2 February 1993:7. Courier Mail 2 February 1993:10 i Davey Fred Davey QC, Melbourne commercial barrister. Joined Qintex board at Skase's request, and at the recommendation of a mutual friend in Stockbroking about 1977.4 Dawe Nick Dawe finance and acquisitions specialist. Dixon* Keith Dixon, Pixie Skase's father. He and his wife Nan moved to Queenland when the Skases did. He secretly transferred funds for Skase after the group collapsed. Ferrell† Sir Ray Ferrell formerly chairman of Ludbrooks. He remained on the Qintex board until his retirement in 1987. FIRB Foreign Investment Review Board. GC Bulletin The Gold Coast Bulletin Harris, Pamela Skase's private secretary. Hartnell, Tony A senior partner of the law firm Allen Allen Hemsley. First chairman of the ASC. Hielscher Sir Leo Hielscher, Under-Treasurer, Queensland Treasury from 1974 to April 1988. Appointed to Qintex Australia Board Novmeber 1988, resigned for family reasons in October 1989. Hili, Albert John Accountant, financial controller at Lloyds Ships from November 1988.5 Hutchins Peter Hutchins, Melbourne accountant and tax avoidance expert, the brother of Wilson Bishop partner Barry Hutchins. ICAA Institute of Chartered Accountants in Australia. IPH Industrial and Pastoral Holdings. Klinger Mr Tom Klinger Stockbroker, first with the firm Eric J. Morgan, later he moved to Mcintosh Hamson Hoare Govett. Kroger Andrew Kroger, McIntosh director. Brother of Michael Kroger (Vic Liberal party). Lloyd's Ships Lloyd's Ships Holdings Pty Ltd, a Brisbans boat-building company, controlled by Qintex and its directors. Masel, Leigh First chairman of the National Companies and Securities Commission (1981-1985). McIntosh Qintex’s Stockbrokers McIntosh Griffin Hamson and Co in 1981. Later Mcintosh Hamson Hoare Govett.6 Mitsui Japanese trading house, bought into Mirage resorts MRT Mirage ResortsTrust. NBC National Broadcasting Company, a subsidiary of General Electric Company. NCA National Crimes Authority. NCSC National Ccompanies and Securities Commission. Newport, Adrian Mr Adrian Lee Newport, a qualified accountant, General manager Lloyd's Ships Holdings Pty Ltd from sometime in 1988 until late 1989. He attempted a management 'buy-out' of Lloyd's, which collapsed in June 1989. 4 Sydney Morning Herald 14 November 1987:81. 5 Newport in evidence Lloyd's Ships public examination.P4. 6 Australian 1 January 1982:11; 5 January 1982:16; 16 January 1982:27. Australian 1 January 1982:9. Sydney Morning Herald Australian 1 January 1982:11; 16 January 1982:32. Australian Financial Review 4 January 1982: 22, 23; 13 January 1982:30; 27 January 1982:40 ii NYSE New York Stock Exchange. O'Neill* Kevin O'Neill Pixie's florist. He and his partner John Graham of Toorak Rd South Yarra, opened a florist shop at Marina Mirage. They provided flowers for every Skase function. The Skases sent a large bouquet of red roses to his funeral after his death from cancer at the beginning of 1997. Peters* Barry Peters. Interior designer worked for the Skases from the 1970s. His designs were an integral feature of their houses, boats and resorts. He followed the Skases to Brisbane and was reported to have been resident in Mallorca in June 1991. The press mentioned an 'abusive' minder called Barry. Pratt, Craig Employed in the Qintex treasury division, a contact with Lloyd's Ships Holdings Putland Geoffrey William Putland, Chartered accountant. Qintex company secretary and group accounting manager, QGMS director and Kodogo company secretary. QAL Qintex Australia Limited. QCAC Queensland Corporate Affairs Ccommission. QEI Qintex Entertainment Inc. Qintex America Inc Projected US listed company to be formed by joining Qintex Entertainmnet Inc with MGM/UA after the ill-fated projected MGM/UA purchase. Not to be confused with Qintex America Ltd. Qintex America Ltd Australian listed company, formerly Hardy Brother (Group) Ltd.