15 April 2009

Investors gutted after maverick walks away with $4.5 million

A maverick entrepreneur has been accused of betraying small investors after cutting a secret deal that netted him $4.5 million dollars but left others facing financial ruin.

Nicholas Bolton, a 27-year-old Melbourne businessman, yesterday won a court case that threatened the existence of Australia’s biggest road tunnel project.

Mr Bolton bought 47 million shares in BrisConnections for one-tenth of a cent each last November, unaware that the shares also required two additional installment payments of $1 per share.

Yesterday, a court ruled that an extraordinary meeting of shareholders to vote on whether BrisConnections could be wound up could go ahead.

But just hours later at the meeting, it emerged that Mr Bolton – whose company Australian Style Investments (ASI) owns 19.9 percent of BrisConnections – had sold his voting rights to another major shareholder, the roadbuilder Thiess-John Holland, for $4.5 million.

If the vote to wind the company up had been successful, both Mr Bolton and the many small investors facing huge installment payments, would have been saved. However Mr Bolton voted against all the resolutions he had proposed in an about-face that stunned investors.

Investor Luciano Giangiordano described it as "a sham".

Another unit holder John Cunningham said he was "disappointed" by both BrisConnections and Mr Bolton. "I feel most of the unit holders have been betrayed," he said.

Mr Bolton did not front the meeting, leaving investors fuming. Some are now threatening a class action against him.

It also emerged that Mr Bolton had instigated the sale of voting rights to Thiess John-Holland.

The builder said in a statement the deal, which began with an approach by Thiess to ASI last Wednesday, had been made to save "a vital piece of infrastructure for the people of Queensland".

"Thiess John Holland took this unprecedented action to seek to ensure the project continued without disruption," it said in a statement, adding the project would create around 10,000 jobs over its life.

The BrisConnections shares bought by Bolton and others are installment receipts. Investors in installment receipts pay a small initial payment when new shares are issued and then pay further installments later, usually within two years.

Mr Bolton has said little since yesterday’s extraordinary meeting but claims he still faces the massive installment payments despite the sale of voting rights.

A Facebook fan page, which had been set up in the weeks leading up to yesterday’s meeting, had today been removed from the social networking website.

The fan page described Mr Bolton as “Dude of Corporate Australia”.

money.ninemsn 15 Apr 2009

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