Matthew Perrin, the former chief executive of surfwear giant Billabong, has declared personal bankruptcy after failed investments in China left him with debts of around $28 million.
Graham Starkey of chartered accountants PA Lucas & Co was appointed as Perrin’s trustee-in-bankruptcy. He has said Perrin’s assets are “negligible” and the bulk of Perrin’s debts are owed to banks and Chinese investors.
Perrin and his wife Nicole were valued at $150 million by BRW magazine last year. The bulk of the couple’s fortune came from Perrin’s stake in Billabong, which he sold over 2002 and 2003 for around $98 million.
The sale of the shares was extremely controversial. Perrin sold a $66 million parcel of shares without telling his board and left the company shortly after.
Since leaving Billabong the entrepreneurial Perrin has made a series of investments, including buying a stake in a high-tech surfboard maker Firewire. But this company has struggled to combat a glut of surfboards on the market and shifted its manufacturing operations from Australia to Thailand last year
Perrin had more success with his take in software company RuleBurst, which was sold last year to IT giant Oracle for $150 million.
But the proceeds of this deal appear to have been sucked up by Perrin’s biggest investment, a stake in a Chinese supermarket business located in the booming provinces of Xian and Hunan.
Perrin was believed to own half of the chain, which reportedly had 250 stores, and was said to be looking to eventually float the venture.
But it appears this Chinese play bought Perrin undone.
A statement issued yesterday by Perrin’s solicitors, Minter Ellison, said his demise had been triggered by “the significant investment made by Mr Perrin and those entities that he controls in a supermarket and property group located in the Xian and Hunan provinces in China over a period of more than three years”.
“The performance of that group in the current financial climate, combined with significant investment debt and guarantee obligations undertaken by Mr Perrin and his associated entities, have resulted in the action taken today.”
Starkey will now investigate Perrin’s assets and liabilities and then arrange a meeting of creditors.
Perrin and his brother Scott first became involved with Billabong in 1998, when founder Gordon Merchant was looking for investors. Perrin became chief executive in 1999 and then guided the company through its spectacularly successful float in 2000. The stock listed a $2.60 and was trading at almost $10 just one year later.
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James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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