John McGrath says his punting losses are "well within his means"

John McGrath says his punting losses are "well within his means"
John McGrath says his punting losses are "well within his means"

Estate agent veteran John McGrath has reacted quickly to the 9.42am trading halt secured this morning by the panicked, soon-to-depart McGrath Group directors and executives.

Rampant rumours forced McGrath to break his personal mantra of avoiding comment on adverse media.

He issued a 6.29 pm statement to shareholders who have watched the wealth destruction of the company escalate in recent days with dismay.

"The ridiculous recent press coverage seeking to link matters which are personal to me with McGrath Limited is distracting attention from the important work of the company, to a point where I have concluded I need to make a statement to clear the air."

The dysfunctional McGrath board had asked the ASX to suspend shares from trading this morning after the company "become privy to further information", which it wouldn't comment on, other than assuring shareholders "they had not taken the step lightly."

McGrath has been in the news recently over alleged, but limply denied, $16.2 million gambling debts and its alleged funding through an alleged $100 million margin lending facility.

McGrath's response this evening addressed the issue with more candor than his pronouncements over the past two weeks.

"Like many Australians, I enjoy a punt," he told shareholders.

"I have a credit account with a bookmaker for this purpose.

"That account is not secured by, or otherwise connected with, my shares in the company.

"The account is well within my means in the context of my net wealth.

"I am in full compliance with the terms of that account.

"I have never, and would never, let what I might choose to do in my personal time impact upon the company."

McGrath then advised he dedicated more than 60 hours per week to his work for the company he founded 30 years ago.

"I thank the great team at the company for their support at what has been a personally challenging time for me.

"I will continue to focus my energies on the important work of improving performance, growing the company and restoring shareholder value.

"I do not intend to comment further on this personal matter," he concluded, without advising whether legal action would be pursued.

Last week John McGrath advised shareholders the $16.2 million gambling debt allegation was "rubbish" and that he had never used his McGrath shares as security for any loan.

Ending the day of debacle, the listed real estate agency also needed to update the ASX with a corrected financial advisory at 6.46pm, given an embarrassing nine errors when McGrath Group reported its small loss. There were no wrong numbers in the statutory accounts, rather the investor pack. 

Last week John McGrath told the McGrath Group board that he was well progressed in discussions with securing new proposed directors (two appointments are needed as a minimum) to replace those who had recently handed in their resignation to allow John McGrath to resume executive control, apparently without any privatisation.

It will see the departure of the McGrath chair, Cass O’Connor who has presided over a board united in obvious turmoil with the company founder.

The news of the deteriorating trading results in the McGrath estate agency finances first emerged last month in an internal document obtained by The Australian Financial Review.

Details of the McGrath board meeting on Friday, January 19 were published on the following Monday, January 22.
 
The Fairfax newspaper also advised there had been "threats by the board to resign en masse over the Christmas holiday."

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

Tags: 
Mcgrath John Mcgrath

Comments

Be the first one to comment on this article
What would you like to say about this project?