The disgruntled son of a late West Australian mining magnate says he inflated valuation estimates in negotiating a deal with his siblings to sell his stake in the family business.
Julian Wright is suing Angela Bennett and the late Michael Wright in the WA Supreme Court, saying they tricked him out of his fair share in their late father Peter Wright’s fortune by failing to disclose the true value of his assets.
Wright Prospecting partnered with Hancock Prospecting to pioneer the Pilbara iron ore industry and is now worth billions of dollars, but Julian Wright sold his share in the company for just $6.8 million in 1987.
Testifying on Thursday, he said he sought valuations for net assets and royalties in 1986, and had no information on the worth of mining tenements.
He said he ended up doing his own calculations and “cheated a bit” estimating royalties because he “used a longer time period” than he “really believed in”.
Mr Wright said he thought at the time the royalties would last for another 10-20 years – but they flow to this day.
He also said he pulled a mineral reserves estimate “out of the air”.
“It helped boost my figure a bit.”
He used the numbers to try to convince Wright Prospecting lawyer Carnie Fieldhouse that $10 million for his share in the company – which he believed “easily” had a total worth of $60-90 million – was “more than reasonable”.
“He said ‘that’s eminently reasonable and I’ll put that to them straight away’,” Mr Wright said.
But his siblings refused, saying they would instead consider $8 million, which Mr Wright deemed unacceptable.
He unsuccessfully sought “spare assets” that had nothing to do with the business to make up the difference including their parents’ apartments, a yacht and a Palm Beach cottage.
“It would be no pain to them to help me get my price up,” Mr Wright said.
“They seemed adamant they would not give me assets in kind.”
He gave snippets of bitter acrimony within the family, recalling an angry outburst by his brother during a meeting and describing his father in a “foul mood”.
It emerged he told an auditor he was concerned about the company’s management, saying he had “no faith” in his brother’s abilities as a chief executive and believed his sister didn’t have “the requisite skills”.
Mr Wright also told the court that after Michael Wright visited the Pilbara, all he reported was his plan to upgrade security at the Wittenoom asbestos mine and spend some money on exploration vehicles.
Last week, a lawyer for Mr Wright’s siblings told the court he had been an active board member and they did not conceal anything.
They argue Mr Wright’s action is “utterly fatal” because a settlement in 2008 saw his children receive $70 million and included an agreement he not sue his siblings over the will.