McGrath breaks silence on allegations of gambling on the company dime
Written on the 9 February 2018 by David Simmons
In a statement to the ASX on Friday, John McGrath has denied the existence of a $100 million lending facility that allegedly is funding his expensive gambling habit.
Over the weekend it was reported that real estate mogul John McGrath is $16.2 million in debt to gambling.
Fairfax Media reported that McGrath allegedly owes $16.2 million to the Tom Waterhouse betting company William Hill Australia.
It is alleged that McGrath has an account at William Hill under the name of "John Wilson", which is in $16.2 million worth of debt.
Tom Waterhouse refused to reveal the name of the account holder when the story initially ran on Saturday.
The story caused shares in McGrath's listed company McGrath Limited (ASX: MEA) to fall sharply on Monday. Shares fell as much as 8.5 per cent to 43 cents per share on Monday.
On Thursday, the press speculation continued, with The Australian claiming McGrath has a $100 million margin lending facility attached to the private company that controls more than half of his stake in McGrath.
McGrath has now come out denying the existence of any such lending facility from Fondorru Pty Ltd, making a statement to the ASX on Friday.
"McGrath Limited refers to the press speculation on 8 February 2018 in relation to a purported margin lending facility by John McGrath's investment company, Fondorru Pty Limited, which holds shares in MEA," said the statement.
"John McGrath has today confirmed to the Board of MEA that there is no margin lending facility with respect to his shares in MEA and that his shares in MEA are not and have never been used as security for any loan."
On Monday the company's third-biggest shareholder and former franchisee, Shane Smollen, said the issue of John McGrath's alleged gambling debt was a distraction from more important matters.
"McGrath is a great company, it's in a position that can be turned around, and anything that provides a distraction from that is clearly negative," says Smollen.
McGrath is known to be a fan of horses and racing, but those close to him, including Smollen, have denied that he has any gambling debt.
In an internal memo sent to his staff over the weekend, McGrath claimed the Fairfax report from 3 February was "rubbish".
"I'm sorry that I have been targeted, but I am more concerned about your guys than about me," says McGrath.
Shares in McGrath Ltd have dropped on Friday, trading down 2.25 per cent to $0.44 per share at 11.25am AEDT.
Business News Australia
Author: David Simmons