The “Jarrett Deed” should have been a “Red Flag” document for any honest trustee, “Regulator” or Law Enforcement Agency, for the simple reason that Ken Jarrett was the subject of several major investigation by the former National Crime Authority (NCA).
More details on the “Jarett Deed” can be found here.
The fate of the NCA was sealed in 2002 when the then Chairman, Gary Crooke QC, started to publicly contradict and argue with the then Prime Minister John Howard and the NCA was replaced by the Australian Crime Commission (ACC).
Not only was Mr Jarrett the subject of several major investigations, he served a term of imprisonment as an outcome of one of these investigations.
There were three investigations conducted by the National Crime Authority in to the activities of Mr Jarrett and his associates:
- Operation Albert
- Operation Alice
- Operation Leopold
Operation Albert was an investigation into the “H-fee” foreign exchange transaction with New Zealand Businessman Allan Hawkins that related to a payment for his role in the purchase of shares in BHP.
The alleged fraud involved a now infamous cross-shareholding agreement between Elders and BHP, back in 1985. The Melbourne coterie of Elliott and BHP combined to stave off attempts by Western-Australia based Robert Holmes a Court to take over BHP. Allan Hawkins’ Equiticorp and Richard Pratt provided funding to Elders for the purchase of BHP shares. Later, Elders would “repay” Hawkins through a fictitious foreign exchange transaction (which led to Hawkins’ jailing). Pratt would be repaid through Elders making a $50 million investment in a Bahamas-based company called Vic Invest. Mysteriously, Vic Invest would soon vanish, along with Elders’ “investment”. (Another dubious element of the cross-shareholding involved a parcel of Elders shares worth $US105 million, which were sold to BHP. Those shares were claimed to have been secretly owned by Elders executives in Swiss bank accounts, including Elliott, according to former Elders finance chief Ken Jarrett).
Ken Jarrett served a term of imprisonment for dishonest conduct as an outcome of the investigation.
This Operation was also known as the convertible bonds investigation. In 1986, when BHP was under threat from Robert Holmes a Court, a parcel of convertible bonds was sold to BHP as part of that transaction. There had been speculation in the marketplace that several executive Directors of Elders IXL Ltd were the beneficial owners of those convertible bonds Ken Jarrett pleaded guilty to, a breach of his duty as a director of Elders, and he acknowledged in pleading guilty that he and Mr Elliott and Mr Scanlon were the beneficial owners of these convertible bonds. The sale of those convertible bonds reaped them a profit of around $70 million-odd.
NCA Investigator Garry Livermore confirmed to the Committee that the NCA wass in possession of material confirming what Ken Jarrett said about the money coming from Swiss Bank accounts of Scanlon and Elliott into Australia as the equity they needed for the Harlin transaction, the attempted privatisation of Elders.
Operation LeopoldOperation Leopold was linked to the “H-fee” investigation of Operation Albert.
In 1986, during the Holmes a Court attempted takeover of BHP, Allan Hawkins and Richard Pratt jointly controlled the company that came into the marketplace and bought about five per cent of BHP shares right towards the end of the takeover offer of Holmes a Court. Holmes a Court’s people have always asserted that it was that activity that thwarted his takeover of BHP
Ken Jarrett pleaded guilty to, a breach of his duty as a director of Elders, and he acknowledged in pleading guilty that he and Mr Elliott and Mr Scanlon were the beneficial owners of these convertible bonds. The sale of those convertible bonds reaped them a profit of around $70 million-odd.