The mining fight

There are probably no more mysterious characters on the Australian rich list than David Teoh, the founder of tech giant TPG, and Phil Matthews, the investment guru behind Matthews Capital.

Both men shun the media and the public eye, but both are hugely respected in their fields. And both are about to become embroiled in a fight over a coal mine.

The Teoh family and Matthews Capital are both investors in a unlisted mining group called Coal of Queensland, which is headed up by mining entrepreneur and biggest shareholder, Paul Williams.

The company rose to prominence earlier this year when it began the process of preparing for a stock market listing, with Williams talking about a valuation of $800 million.

But the float hasn’t happened as quickly as many thought and it seems Williams is now having a bit of a problem with some of his shareholders.

According to a report this morning in the Australian Financial Review, Teoh, Matthews Capital and some other shareholders bought into Coal of Queensland in June last year, grabbing 21% for $35 million, valuing the company at $170 million.

Not bad buying, given the company is now worth up to $800 million.

But the shareholders say that the same time they made their initial investment, they also agreed to buy and extra 25% of the company for $50 million – again, a big discount based on the numbers being thrown around now – if Coal of Queensland floated by April 30.

That listing is now unlikely to occur by that date, leading Matthews, Teoh and the minority shareholders to launch action in the NSW Supreme Court to try and remove the directors of Coal of Queensland’s parent company.

Williams’ private company has denied the other shareholders are entitled to the 25% and says it “continues to comply” with all its shareholder agreements.

“The company continues to evaluate the right pathway to commercialise its assets on behalf of all shareholders,” a spokesperson told the AFR.

It will be fascinating to see how the case plays out, but equally fascinating is the fact that it involves two of the more reclusive members of the rich list.

For example, up until this case emerged, the fact that David Teoh has been playing much outside of the telecommunications space was not known. Similarly, the positioning of Matthews Capital as a sort of angel investor puts something of a different light on his operations.

This case also has the added benefit of involving Paul Williams, who looks likely to become a rich list member in the coming years.

Stay tuned!


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