The Secret Seven's marvellous adventure

IT WAS almost summer holidays again, the crickets were chirping at dusk and the seven special friends had found themselves in an exciting adventure. They'd been hauled before New South Wales' Independent Commission Against Corruption.

Day after day, a horrid gang, the Learned Friends, were taunting them with beastly accusations. Geoffrey, the meanest of the Learned Friends, kept saying they were fibbing. He kept making them remember silly things that had happened long ago.

If you haven't met the Secret Seven, there are three sets of best friends: Travers "Trav" Duncan and Brian Flannery, John McGuigan and John "Atko" Atkinson, and John "Kingy" Kinghorn and Greg "Jonesy" Jones - and an investment banker Richard "Digger" Poole just for good measure.

The Seven had hatched a brilliant plan. They got their hands on a New South Wales coal licence for $1 million and almost sold it for $500 million. That was after the Mines Department mysteriously got five different letters from five different companies linked to the Seven asking to be allowed to tender. Anyway, after all that to-do, Cascade Coal emerged with the licence.

Suddenly one day, although nobody knows exactly when, they found this fellow Obeid lurking about in Cascade. What a shock! If "unethical" journalists from The Sydney Morning Herald, as Kingy calls them, found out more about this they might write "tripe" and spoil their plans to sell Cascade to White. Then they wouldn't be able to get richer. Well, things were going swimmingly until this goody-two-shoes from White, Graham Cubbin, started asking silly questions about Cascade. Graham was an independent director of White and seemed to be taking his job of representing White's little shareholders a little too seriously.

Ghastly fellow he was, a real pest. "We just got to get there first," Kingy confided in a phone call to Jonesy intercepted by ICAC, "then we'll chop the arsehole's head off."

The lads were no strangers to adventure. Indeed, after telling Geoffrey he would dob him in to the Law Council for fibbing, Kingy reminisced for a moment about the good old RAMS adventure. Ah, those were the days, after his Allco adventure, when he'd sold RAMS home loans to that silly old sharemarket and taken a splendid $500 million in cash just days before the global credit crisis. He would give those Learned Friends a piece of his mind.

THERE were 1000 gems in the ICAC cross-examinations this week, and there will be many thousands more before Eddie Obeid even gets in the box. We have selected a few, readers, for your edification.

Geoffrey Watson, counsel assisting the commission, to John Kinghorn:

"It wasn't anything to do with the

fact that Greg Jones had a previous relationship with Ian Macdonald [mines minister] was it?"

"I've heard you allege that and that is utter tripe."

"Utter tripe?"

"Utter, utter tripe. Rubbish, rubbish."

"A lie by me?"

"I think it was a bit of a fabrication by you, yes, because you actually said you had evidence to this effect and I do not believe you do have evidence to that effect."

Watson to Kinghorn about a meeting of Cascade shareholders:

"So you attended a meeting and voted on an issue of 717,000 shares to Coal and Minerals Group [a vehicle set up to distance Cascade from Obeid] without having even any idea as to why that was being done. Is that what you're telling us?"

"At that point in time, correct."

"And have a look at the price that was being paid ... for the shares: 9.3 per cent of the capital of Cascade Coal was being sold for one ten-thousandth of a cent per share, do you see that?"

"I do."

"Well, surely you asked the question about that?"

"Yes, I did."

"At the meeting?"

"No, I did not."

"Right. You sat there at the meeting thinking, 'Good God, they've just given away ... 60 million, yeah, $60 million of value?"

"Mmm."

"So you just sat there and just thought, 'Dear me, they've just given away $60 million for $71.78'. Is that what you thought?"

"It certainly piqued my interest and I wanted to find out what it was about."

That bit of testimony is typical. The entire proceedings are spiced with it: misunderstandings, foggy recollections, lack of curiosity, dumbfoundedness, emails received but not read; and this from seven people worth collectively more than $1.5 billion.

Let's close with Winners and Losers so far.

Losers: the Secret Seven - they sustain reputational damage and have no deal, though Poole probably got some banking fees. Likewise, Brent Potts and his "Lost Arc" clients have dusted $28 million in the White placement though Pottsie probably got his 5 per cent.

Winners: the Obeids are still up $30 million and there is no smoking gun, yet.

Real winners: the incoming Liberal government in NSW earns big points for a rise in ICAC's funding.

Graham Cubbin can stand tall. A

real independent director, doing an admirable job.