THE horseracing interests of self-made mining magnate Nathan Tinkler are in deep financial crisis after having failed to meet the superannuation payments of its workers since November.
Internal documents from Mr Tinkler's racing company, Patinack Farm, show staff are on the point of "mutiny" after a series of failed promises to have the unpaid superannuation made up.
It is also understood that, following complaints from employees, the Australian Taxation Office has begun an investigation.
In one internal email seen by Fairfax, staff were told the delay was due to "cash flow management", while in another correspondence a member of the accounts team admits: "It's very frustrating for everyone I haven't got mine either!"
The staff member said it needed to be resolved soon "or there's going to be a mutiny".
The failure of Patinack to meet its wage responsibilities comes as Mr Tinkler, whom BRW estimated to be worth $915 million, was last week unable to raise $28.4 million to fulfil an obligation to buy a 34 per cent stake in the listed coal company Blackwood Corp.
On Friday, Fairfax revealed Mr Tinkler unsuccessfully tried to sell his racing and breeding interests to a Qatari sheikh for $200 million, about $100 million less than he has pumped into the sport in the past four years.
A Patinack worker, who asked not to be named, said staff were deeply upset at their treatment by Mr Tinkler.
"This guy's supposed to be a billionaire, so why can't he pay people what they're due? There's a lot of anger and frustration among the staff."
He added: "There's a sense that the whole Tinkler house of cards could collapse. People are definitely worried we won't ever see this money."
Having failed to offload the whole racing operation which is costing him in the region of $500,000 a week to Sheikh Fahad al-Thani, Mr Tinkler will sell 350 horses in October through the Magic Millions auction company owned by retailing billionaire Gerry Harvey.
Racing sources believe Mr Harvey has given Mr Tinkler a cash sum in advance of the sale of about $20 million in order to help his cash flow.
On Saturday, Mr Tinkler had disappointment on the racetrack when his best colt, All Too Hard, a half brother to champion Black Caviar, finished third to Snitzerland in the group 3 San Domenico Stakes at Rosehill when a heavily backed odds-on favourite. If the colt had a poor campaign, it would likely affect its estimated $10 million value as a potential stallion.
Mr Tinkler has a reputation as a master deal-maker after building his fortune on the back of a $500,000 loan to buy a coalmine in which others saw no potential.
He is attempting to privatise the mining company Whitehaven. He owns 21 per cent of Whitehaven's shares. To succeed in that $5.3 billion deal, he needs to raise at least $1 billion from partners.
But Mr Tinkler's Whitehaven stock has slumped recently. On Friday his shares were worth $778 million, down from $1.2 billion in April.
Under federal law, employers are supposed to make super contributions at least every three months. Wage slips for employees still state that contributions are being made, though no money is arriving in super funds.
Mr Tinkler's spokesman declined to comment last night.
Frequently Asked Questions about this Article…
What financial problems is Nathan Tinkler's Patinack Farm facing?
According to the article, Patinack Farm has not paid employee superannuation since November and internal documents show staff are frustrated and on the point of "mutiny." Management has cited "cash flow management" for delays, the operation is reportedly costing about $500,000 a week to run, and Tinkler has failed to complete other planned deals that would have raised funds.
Has the Australian Taxation Office (ATO) started an investigation into Patinack Farm's unpaid superannuation?
Yes. The article says that after complaints from employees, the Australian Taxation Office has begun an investigation into the unpaid superannuation contributions at Patinack Farm.
How could Patinack Farm's unpaid superannuation and cash-flow issues affect investors?
Unpaid super and public cash-flow problems can create legal and reputational risks for the business owner and his related assets. For investors, that can mean pressure on associated share prices, forced asset sales (like horse auctions) and uncertainty around planned deals. The article highlights Tinkler's failed funding and sale attempts, which can signal higher investor risk.
Why did Nathan Tinkler fail to complete the purchase of a 34% stake in Blackwood Corp?
The article reports Tinkler was unable to raise the required $28.4 million to meet his obligation to buy a 34% stake in the listed coal company Blackwood Corp, illustrating his current liquidity constraints.
What is the Magic Millions horse sale and why is Tinkler using it?
Because he could not complete a full sale of his racing operation to a Qatari buyer, Tinkler plans to sell 350 horses in October through the Magic Millions auction company (owned by Gerry Harvey). The article notes Harvey is believed to have advanced about $20 million to help Tinkler's cash flow ahead of the sale.
Could All Too Hard's recent race result affect its value as a stallion?
Yes. The article says Tinkler's best colt, All Too Hard, finished third in the San Domenico Stakes. If the colt has a poor campaign, that could reduce its estimated $10 million value as a potential stallion, which in turn matters to owners and investors in bloodstock or related interests.
How does Nathan Tinkler's attempt to privatise Whitehaven relate to his financial trouble?
Tinkler is attempting to privatise the mining company Whitehaven and owns 21% of its shares. To complete the reported $5.3 billion takeover he needs to raise at least $1 billion from partners. Meanwhile, the article notes his Whitehaven stake has slumped in value (from about $1.2 billion in April to $778 million), which undermines his position and funding prospects.
What should everyday investors watch next in the Tinkler and Patinack Farm story?
Based on the article, investors should monitor official updates about the ATO investigation, any company announcements about unpaid super or cash-flow remedies, progress of the Magic Millions horse sales, developments around Tinkler's attempted Whitehaven privatisation, and any further asset-sale or funding attempts. These events could affect related share prices and investor risk exposure.
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