Confounding expectations, coal baron Nathan Tinkler turned up to face a grilling by lawyers for the liquidators winding up his shelf company Mulsanne Resources, and pointed the finger of blame at powerful commodities trader and his long-time backers the Noble Group.
Mr Tinkler's appearance in the witness box marks the culmination of a period of intense speculation about his deteriorating financial position, fanned by a series of wind-up and other legal proceedings, which the former billionaire has so far managed to settle before substantive court hearings began.
In the lead-up to Thursday's examination, Mr Tinkler tried to settle the dispute between Mulsanne and its major creditor, Blackwood Corporation - including proposing an unfunded, $55 million takeover of the company. He also tried to stay the proceedings with an "abuse of process" claim that was dismissed as "tenuous" by judge Paul Brereton on Tuesday.
On Thursday Mr Tinkler, who risked arrest if he did not appear in the NSW Supreme Court, said a verbal arrangement with Noble fell through last year and he was "left holding the can with this share subscription".
Mulsanne had agreed to pay $28.4 million under a share place agreement, effectively to take a one-third stake in listed Blackwood, but Mr Tinkler conceded that when shareholders voted on July 12, he had "no definitive plan" on where he would find the money, due five days later.
Mr Tinkler said he had expected Singapore-based Noble would pay $25 million to $30 million for his share of a royalty stream from the Middlemount coal mine in Queensland, allowing Mulsanne to complete the purchase of shares in Blackwood. The royalty, of $1 per tonne produced from Middlemount, is owned by private company Oceltip, 75 per cent owned by Mr Tinkler's wife and 25 per cent by Mr Tinkler's former business partner Matthew Higgins - now suing over alleged improper accounting of the income.
Mr Tinkler conceded he could not deliver Mr Higgins' share of the royalty but he believed Noble, if it could not secure 100 per cent, would still have bought his own share. "It was always two separate transactions," Mr Tinkler said. "Ideally they would have happened simultaneously."
As the due date for payment loomed, Mr Tinkler said he was "still hopeful that something could be worked out with Noble".
Mr Tinkler said the deal was based on numerous conversations, particularly with Noble director and head of its coal division Will Randall. The deal was not documented, although in hindsight "I certainly I wish I had done that".
In the affidavit of Mulsanne's liquidator Robyn Duggan, Mr Randall is quoted emailing Blackwood chairman Barry Bolitho in September to say he had met Mr Tinkler but "talk is cheap" and "no solution will be forthcoming until full legal due process is fully exhausted". Mulsanne was placed into liquidation by Blackwood, which is majority-owned by Noble, in November.
Mr Tinkler said he had "trusted" his relationship with Noble and never doubted Mr Randall's authority to do the Oceltip deal. "I put my faith in the wrong people."
Counsel Robert Newlinds, SC, for the liquidator, questioned why, in written answers to a questionnaire on the Mulsanne failure which was provided to the liquidator in December, Mr Tinkler had blamed only "unexpected adverse market conditions" and mentioned nothing about the Oceltip royalty.
"I think it falls under the market conditions," Mr Tinkler said.
Mr Newlinds put to Mr Tinkler that "you never really expected a sale of the Middlemount royalty [to complete before the Blackwood payment was due because] there just wasn't going to be time".
"I disagree," Mr Tinkler said.