Australians are proud of their reputation of trading fairly and making deals honestly, with almost absolute integrity and rare tricky bargaining. What you see is what you get. People doing business have a sure sense of security and accountability, and services and goods are delivered with guarantee and follow ups. Hard bargaining down to half of the offered prices is commonly seen as an insult, indicating that previous offers from an Aussie were not genuine and falsely inflated. This tactics is not tolerable and smacks a kind of untrustworthiness. In business and in the market, there are in general few, very few, cases of full blown frauds and scandals by ego-centric business crooks, in a comparison with sensational and colossal business scandals in the
Business doing in any economy is filled with plentiful stories of rising stars and downfalls. Talks about the “tall poppy” syndrome are common in
This has been harshly categorised as a sign of mediocrity in this society and perhaps a cause to pedestrian pace of growth and creativity in recent times, in an urgent comparison with tiger economies or even with other developed economies. This notion has been turned around by ambitious entrepreneurs for a lack of understanding of and support for their marvelous feats. They could blame this syndrome for the difficulties they encountered in business expansion or failures in efficiently utilising resources. This tall poppy syndrome seems an obstacle to their impressive fame and status to be recognised fully in this mediocre country, unlike those accorded to American super tycoons or management gurus. It also seems to have undermined many successful ventures and destroyed reputations of some celebrities.
There are indeed some prominent cases of fascinating rocket rises and collapses in the business world of
There was a more colourful display in private business sectors of
There are no secrets of how these feats were made. The fortunes of Bond Corporation were built on large and continuing financial backing of banks in years of early deregulation and easy credit. In common business practice, banks look for credible borrowers at their discretion. While they tend to hesitate on lending to small size businesses or ventures and exercise the strictest assessment criteria before issuing a loan, they find it hard not to chase those large corporations deemed credible and offer them generous loans. It may turn out that some corporations are suspiciously more sizeable than they ought to be, but a lending bank is very likely to be hooked on to a certain business which just dangles potential in front of the bank in question and spit out some money as interest payments for ever larger borrowing. Banks under these circumstances have little to resist: they either keep the business running so that they one day could receive the full payment, or pursue the matter to the end and break the business so that they receive little in return. A hooked bank usually avoids taking the second option and is keen to leave the business operational, even if that means pouring in more money for the purpose of liquidity and cash flow.
It must be said that in the business world of
A popular theme in the
Among Bond’s crumpling business empire,
Bond left untold fortunes to his children to be among the richest people of
Another notorious Australian fraud involves Christopher Skase, a golden boy in the media business, who was even deeply surprised by his own sudden fame and fortunes. He owned Seven networks and made numerous bids to get more media businesses under his arms. That over-stretched the finances of his company Qintex, and the pleasing appearances could hardly hide the truth of a vulnerable business on credit. His failure to produce a small amount of money guarantee for a 1.5 billion AUD international deal broke the bubble image. For this relatively young Australian entrepreneur, the cash flow soon halted, bank credits ceased to come, and receivers came to chase after his assets. In panic, Skase fled to
Skase got a big cut in the development of Gold Coast and Port Douglas. Over-leveraged finances were commonplace those days, in that development projects are supported by bank credits, and as long as property sales are made, developers with a small fortune at the start could make it big in the end. The moment of truth comes when developers over-spend money on huge projects and see slow sales. Development in Port Douglas by Skase was not dissimilar to what Donald Trump did in
Bond and Skase bore the immense brunt of public disgust of the rich and extravagant. For high achievers such as Bond, the combination of careless buying sprees, little tax payments, and hiding fortunes for family members eventually put people off. Even during the high tide of deregulation and economic rationalism, there remained little desire for worshipping the super rich and those influential industrial leaders. To Bond, this Australian trait is perhaps the most annoying and evident of a tall poppy syndrome, because, until the corporate scandals surfaced in the early 21st century, worshipping of money and the rich in the US was undisguised, and the media and publications showered those celebrity tycoons and corporate leaders with loads of praises, those people who were just Alan Bond and Christopher Skase of the US. Penalties there on corporate frauds and scandals came much later than in
Exceptions to this super rich group members being dragged down are Rupert Murdock and Kerry Packer. The former has since left
Where is that said “tall poppy” syndrome now? Murdock commands immense admiration, even after he officially became an American citizen and ran true colour tabloid newspapers in the
These and other true stories enhance people’s suspicion of some unexpected fortunes made by celebrity businessmen. There is no genuine confidence on the ability of someone to shoot to the top circles fair and square, and there is even less intended respect accorded to high flyers in this essentially egalitarian society. Public anger and denouncement toward big businesses and their leaders with wrongdoing are often unreserved, rather than sympathy and pity. A lack of proper supervision and regulating of financial markets made matters worse, conducive to the crowded course of rise and downfall of certain “greats”. This is understandable, since regulating was directly against the torrents of deregulation in the same period of time. The Australian Securities Commission took on the role of corporate regulator only in 1991.