Orchard and Global agreed that this deal would be completed through another Mauritius company GCAM and two subsidiaries were set up to own the two Chinese malls, Whacko Mall and Seastar Mall.Global shareholders invested more than $70 million, Babcock and Brown threw in $US40 million, while another company Great Summit Limited -- led by Philippines resident billionaire John Gokongwei -- chipped in between $US30 million and $US40 million. It also had $US$25 million from senior debt providers.Orchard also poured some cash into the mix.Then things started to get complicated. Orchard had moved to buy all of GCAM.Global, which had ambitious plans to float this year, defaulted on certain obligations including on rent on Seastar.Orchard considered investing more money into Global, but decided against it.Mr Perrin had just chipped in part of his personal fortune to settle a Global loan which had been called in.Orchard 'lost confidence' in Global and decided to sell the GCAM companies to the Perrin clan for $US47 million.Then it emerged that there was a missing fire safety certificate on Seastar Mall, a huge problem in China that can result in fines for its owners.It was made known when Macquarie had moved to buy the mall from Global, but stopped short when it discovered the missing certificate.A scuffle continued over which company -- Global or Orchard -- actually owned the mall and whose responsibility the fire certificate was.This happened on the backdrop of a tumbling real estate market, the decline of financier and investor Babcock and Brown, and Orchard's continued push to get out."I will admit doing business in China has been an education for me, a challenge, but also with huge potential rewards," said Mr Perrin in an email sent to companies that had invested in Global Mart, but later opted to sell out, sparking two of the four court battles."We have had issues with culture and understanding and have had setbacks in some respects," he wrote.
As things started to deteriorate, Mr Perrin became more financially involved to satisfy loans and grant extensions from Orchard -- $26 million here, a personal guarantee there.Orchard had said it was 'particularly important' Mr Perrin became involved in the venture."Initially we were offered his personal guarantee, then one of his trusts, one of his companies and ultimately we insisted on obtaining his wife Nicole's personal guarantee," said Orchard's Greg McMahon in an affidavit lodged with the court.After that, things started to erode further.With two of the legal battles dissolved, another still in the NSW Supreme Court and one stuck in the 'too hard pile' in the Supreme Court, Mr Perrin filed for bankruptcy, depleted of his fortune.
|
