SPECIAL REPORT: Some of WA’s top company directors have achieved extraordinary gains in their wealth over the past year, and while most held onto their shares, a group of 11 reaped more than $180 million from share sales.
The past year has been a lucrative period for shareholders in Mineral Resources, particularly the directors and senior executives with big holdings in the company.
In a generally flat stock market, the share price of the mining services company has jumped from $3.50 in January to around $13.30 currently, close to the highs achieved in 2011 and 2012.
The biggest winner has been managing director Chris Ellison, whose shares in the company have risen in value over the past year to $329 million.
Chairman Peter Wade took advantage of the share price gain, reaping just more than $8 million from the sale of 900,000 shares at $8.97.
Senior executives Bob Gavranich and Steve Wyatt secured even larger gains.
Mr Gavranich sold 3 million shares (nearly all his holding) and Mr Wyatt sold 2.6 million shares (a bit over half his holding).
The company did not disclose exactly when they sold or what price they obtained, but assuming they sold at the same price as Mr Wade, they would have earned $26.9 million and $23.3 million respectively.
In terms of dollar value, however, former Perth stockbroker Josef El-Raghy, who chairs London-listed and Egypt-focused gold miner Centamin, surpassed them all.
He made $36 million from the sale of 17.6 million Centamin shares during the year.
Despite the sales, the value of his holding (which reduced to 53.8 million shares) still went up – to $119 million.
The strong gains by gold stocks enabled Regis Resources managing director Mark Clark and his counterpart at Northern Star Resources, Bill Beament, to sell part of their holdings at attractive prices.
In good company
Meanwhile, some very successful former company directors have completed large share sales over the past year.
Robert Branchi, who was chairman of Automotive Holdings Group until 2010, raised $15.1 million from share sales between April and August.
His family company, Auto Management, has retained a 4.4 per cent stake in the company, according to AHG’s annual report, currently valued at $53.6 million.
Former Regis Resources chairman Nick Giorgetta also lightened his holding, selling 7.6 million shares between April and September.
The proceeds were not disclosed, but based on share price movements over that time he is likely to have obtained at least $20 million.
Mr Giorgetta still holds 11.9 million shares valued at $33.2 million.
Other company directors to have completed big share sales over the past year include Richard Goyder, Karl Simich and Barry Patterson (see table).
In contrast, very few directors have put serious money into their holdings.
One exception was Austal chairman John Rothwell, who took advantage of a sharp slump in the ship builder’s share price to buy 3.8 million shares at $1.22 in January, just a few months after selling 3.5 million shares at $2.07 each.
With Austal shares currently trading close to $1.90 each, he is well ahead on the purchase.
By far the biggest backer of his own company is Fortescue Metals Group chairman Andrew Forrest.
Over the past six years, Mr Forrest has consistently added to his holding in the iron ore miner – earlier this month he spent $6.9 million buying 1.3 million Fortescue shares.
That lifted his total holding to 1,038,800,000 shares – just above one third of the company’s total shares.
The value of Mr Forrest’s holding has fluctuated widely during the past decade, and over the past year has rocketed to $6.46 billion as Fortescue’s share price has lifted.
That makes him one of the country’s wealthiest people and puts him just ahead of fellow iron ore magnate Gina Rinehart, whose net worth was estimated at $6.06 billion in the latest BRW Rich List.
Family wealth
The rich list shows that, apart from Mr Forrest and Seven West media chairman Kerry Stokes, the really large fortunes in Western Australia are in private hands.
The list includes some self-made fortunes, such that of Stan Perron, who started off as an earthmoving contractor and now has a secure income from Toyota sales and extensive property investments.
Ralph Sarich, Jack Bendat and Kerry Harmanis are others to have made their own fortune.
The BRW Rich List also features a lot of inherited wealth – and legal disputation.
The Buckeridge family is valued at $2.5 billion, courtesy of the hard work of BGC founder Len Buckeridge – however his descendants are now mired in court cases arguing about the carve-up.
It’s a similar story for the descendants of Lang Hancock (Gina Rinehart and her daughter Bianca Rinehart) and his business partner Peter Wright (Angela Bennett and her nieces Leonie Baldock and Alexandra Burt).
Big gains
Mining investor Michael Fotios achieved spectacular gains over the past year, primarily on the back of the lithium boom.
He formerly chaired General Mining Corporation, which played a key role in reviving Galaxy Resources’ Mt Cattlin project before striking a lucrative scrip merger.
Mr Fotios has ended up with a stake in Galaxy valued at $53 million, a gain of 887 per cent over the value of the General Mining shares held one year ago.
His second success story has been Eastern Goldfields, which he spent several years trying to restructure under its old name of Swan Gold Mining before completing a $30 million debt-for-equity swap and a $25 million recapitalisation this year.
Business News has estimated Mr Fotios’s total portfolio of listed shares is currently worth $93 million, an increase of 611 per cent over the past year.
Another diversified mining investor to do well last year was Ian Middlemas.
His share portfolio, including Salt Lake Potash and uranium play Berkely Energia, more than doubled in value to $27.2 million.
Ausdrill boss Ron Sayers had a good year as did prospector Mark Creasy, with the value of his stake in gold and nickel producer Independence Group jumping 44 per cent to $450 million.
