McGrath says it has 'information' on founder John McGrath's alleged gambling debts

Written on the 15 February 2018 by Ben Hall

McGrath says it has 'information' on founder John McGrath's alleged gambling debts

Listed real estate business McGrath (ASX: MEA) says it has "further information" and is seeking "urgent clarification" from founder John McGrath over media reports he has $16.2 million in gambling debts.

McGrath shares were placed in a trading halt on Thursday as outgoing CEO Cameron Judson said further updates would be contingent on John McGrath providing further information on the allegations.

During an investor call following the release of the company's half year results which revealed a $25.5 million loss, Judson indicated he would soon reveal key information surrounding the gambling debt claims.

"The company has become privy to further information, which I can't comment on, and is seeking urgent clarification from John McGrath," Judson says.

"The board has considered this trading halt a significant development and let me assure you they have not taken this step lightly."

In announcing its half yearly results, the company says the significant loss was the result of impairments and poor performance by the company-owned sales business.

Shortly after posting the half-year results, McGrath went into a trading halt because of "recent media comment in relation to Mr McGrath".

The real estate group took a $21.8 million hit in goodwill and a $1.1 million goodwill impairment of Property Management rights.

Revenue for the six months to December 31 was $51.6 million, down 23 per cent on the same period a year ago. No interim dividend will be issued to shareholders.

The controversy surrounding John McGrath stems from media speculation that McGrath is in debt to gambling company William Hill Australia to the tune of $16.2 million. John McGrath has denied this.

Further controversy arose when it was alleged that John McGrath has a $100 million lending facility which is allegedly funding his gambling habit, which he has also denied.

Shares in the real estate company dived to a record low of $0.42 on Tuesday after three board members resigned from the embattled company. It listed in 2015 at $2.10.

The departure of chairman Cass O'Connor and non-executive directors Elizabeth Crouch and Cath Rogers leaves founder and 26 per cent shareholder John McGrath as the company's only remaining board member.

CEO Cameron Judson and the entire McGrath board will be out the door by close of business on Friday and John McGrath says he will take on the chief executive and chairman roles.

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Business News Australia




Author: Ben Hall





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