One of the worst of Bond’s acquisitions was the ailing Americanbrewer G Heileman, for which he paid $1.26 billion in 1987, aroundthree times what it was worth. Heileman, Bond figured, would be theperfect vehicle to launch his local brewing assets – Swan,Castlemaine and Tooheys – in the US market. It turned out to bemerely another symptom of an incurable condition which caused Bondto do deals and then juggle his increasingly massive debt to payfor them.
In the same year he bought Heileman, Bond also made the mostexpensive art purchase the world had ever known. But the $US54million he paid for Vincent van Gogh’s Irises was typical of hisunusual deals, its purchase having been financed to the tune ofaround $US27 million by the auctioneer Sotheby’s. Bond never paidthem back, and the painting never graced any of his homes. Bondmeanwhile struck another deal during the same period that typifiedhis doubtful business acumen and became part of Australian businessfolklore.
The purchase from Kerry Packer of the Nine Network for $1.05billion, and its later sale back to Packer for $300 million was adream transaction – but not for Bond. By 1989, the man who hadmarched boldly into boardrooms around the world found himselffirmly on the back foot with Bond Corporation’s debt at astonishinglevels and his once compliant bankers clamouring for repayment.More persistent than the bankers, however, was the Englishbusinessman Roland “Tiny” Rowland, in whose company Lonrho, Bond,using yet more borrowed money, had acquired a substantial holding.Rowland pulled Bond’s business empire apart in a 93-page documenthe published showing it to be insolvent and trading illegally.Rowland’s revelations made an already slippery slope ever moreperilous. The first part of his father’s forecast came to pass in1991 when Bond faced trial for theft over a deal to rescue thefailed Rothwells merchant bank. It was a case that revealed muchabout how business was done Bond-style.
Bond allegedly talked a business colleague Brian Coppin intotipping a few million into a rescue of Rothwells while concealingthat Bond Corp would receive a $16 million fee for organising therescue. Bond served six months, only to be acquitted at a re-trial.That success proved fleeting as the world continued to crash downaround the man who little more than a decade earlier had been namedAustralian of the Year. In 1996 Bond was committed to stand trialfor defrauding the shareholders of Bell Resources, a company he hadacquired from the late Robert Holmes a’Court, of more than $1billion. He also stood trial and was jailed over a fraudulent artdeal involving the Edouard Manet painting La Promenade which Bond’spublic company, Bond Corp, sold to his private company Dallhold for$2.46 million. He got four years for stealing the money from Bellresources and three for the art deal. Together the guilty verdictsmade him the biggest fraudster in Australian history.
Research the case of early corporate collapses in Australiamentioned in the textbook on page 11: Alan Bond. Prepare a briefreport outlining the case. What was the underlying reason for thefailure? Would today's corporate governance codes, rules andregulations have prevented these outcomes? (200 words)
