From the Archives, 1994: Skase has his freedom

Supported by his wife Pixie and his son-in-law Tony Larkin, Mr Skase, who is now free to stay in Spain, compared his eleven months in a hospital prison on Mallorca with the suffering of the South African Nobel Prize winner. President Nelson Mandela and Terry Waite, British Anglican Ambassador for Peace, who was a hostage in the Middle East.

“It’s very, very difficult to put simple words,” said Skase. “But when I think about what I’ve been through and how I’ve felt, I read … about everyone from Terry Waite to Nelson Mandela – you just think how incredible it is that some others have gone through five years and in another case, what was it, 28 years? It’s an experience that touches every physical and emotional fiber of your body. “

Mr Larkin told journalists they would have to apply for rights to Mr Skase’s story. Mr. Skase is facing charges in Australia of over $ 10 million in misuse of corporate funds.

Mr Skase, bearded and in a tracksuit in front of his million dollar mansion on the island resort – where superstar Michael Douglas and supermodel Claudia Schiffer call home – looked pale but spoke without the respirator that accompanied his court appearances. He pointed out that Friday’s decision by the Spanish Audienca Nacional to overturn a previous court ruling granting his extradition came as a surprise.

“It’s a very strange feeling: not having seen the sun, the stars, the trees or the sky for most of a year,” he said. “Yesterday started like day 300 or whatever it was and suddenly it was home to me.”

While the court has not yet released its reasons for the extradition, there is little doubt that Canberra lost its battle to get Mr Skase back. According to the Australian Ambassador to Madrid, Warwick Pearson, there are no other legal remedies.

“As far as I can see, it’s the end of the line,” he said. “I am not a lawyer, but the legal process in Spain seems to be over.”

Skase, 45, was due to be tried in Brisbane on 32 Australian Securities Commission charges of alleged mismanagement of his Qintex group.

Shortly after the resort and media company that operates the Mirage Resorts collapsed in 1989 with more than $ 1 billion in debt, Mr Skase fled to Mallorca and a two-level mansion that once belonged to a Russian prince.

Standing on the back of the luxury home that some claim Mr Skase or his family bought for more than $ 2 million, he stated that he would not leave Australia even though he would seek Spanish citizenship.

Christopher Skase at a court appearance in Spain, 1994.Recognition:AP

He said there was a “small but growing army of people” that supported him. “It’s just a great thrill and a tremendous day for a lot of people. A day of justice,” he said.

He said he’ll go into more detail about how it was in the infirmary later, adding, “I mean it wasn’t a Mirage Resort.”

When asked if he had any words for the Attorney General, Mr. Michael Lavarch, who was prosecuting his extradition, Mr. Skase said, “Look. I don’t want to spoil the day.”

He said there were “quite a few things to talk about,” but he would do that later. Sources in Mallorca said Mr Skase kept a diary in the prison department and planned to publish a book.

Mr Skase claims he has no money, but a Mallorcan newspaper, the Diario de Mallorca, says that shortly before he was arrested in January, he bragged, “I’m going to bring the rest of my fortune to Mallorca – about 10,000 million pesatas (about $ 100 ) Million) “.

The newspaper quoted Ms. Pixie Skase as saying her husband was broke and another family member said, “We are beggars”. However, it was found that Ms. Skase was driving a Mercedes.

It won’t be clear until later in the week why the Spanish Court of Appeals has granted Mr. Skase “unconditional freedom”. The Diario de Mallorca speculated that this was not due to humanitarian reasons related to his health problems. Mr Skase says he has a serious lung condition that would make air travel life-threatening – a claim that was rejected by Australian authorities.

However, another Mallorcan newspaper, Ultima Nora, believes that medical reasons could be responsible for the verdict, along with the argument by Mr Skase’s attorney, Mr Antonio Coll, that crimes Mr Skase has faced are not so in Spain be taken seriously like in Australia.

The Spanish Federal Court earlier this year ordered the Madrid extradition treaty signed with Canberra in 1988 to be used to return Mr Skase to Australia.

The court raised concerns about Mr Skase’s health, but Australian officials agreed to spend more than $ 1 million to send a virtually new high-tech ship to Spain to bring Mr Skase back. The $ 20 million ship, operated by a crew of 16, was to be equipped with a surgical and medical team.

Mr Skase says he cannot fully recover from his respiratory disease without a lung transplant.

A sad story with no hope of a happy ending

Malcolm Maiden, business editor

The losers in the Qintex affair are legion. With the exception of the now very embarrassed Australian Government and its Australian Securities Commission, however, the damage was done long before the Spanish court gave Mr. Christopher Skase his freedom.

Christopher Skase at Channel 7 Studios, 1988.

Christopher Skase at Channel 7 Studios, 1988. Recognition:The age archive

Mr. Skase contributed to Victoria’s biggest financial debacle, the collapse of the State Bank of Victoria. He was one of the largest single borrowers to the runaway SBV commercial bank Tricontinental, which loaned and lost more than $ 150 million to various Qintex Group companies and Mr. Skase himself.

A total of 4,000 people held shares in Qintex, including Mr. Skase, who controlled about half of the shares. They supported Mr. Skase’s vision of a global leisure and entertainment group, but saw that their stakes were declared worthless.

Many financial institutions that loaned Skase companies made unsecured or subordinate funds available and lost.

Qintex recipients have roughly $ 14 million left to distribute, which equates to roughly two cents in U.S. dollars for roughly $ 1 billion in debt.

But the group of 10 senior lenders who took on the safety of Qintex’s undeniably world-class assets – its resorts and television network Seven – fared much better.

The senior banks, including the ANZ and the Commonwealth of Australia and HongKong Bank and Bank of America, agreed to a complex bankruptcy administration that involved selling Qintex’s resorts and restructuring the Seven Network, and then transferring it to the for $ 700 million Exchange were brought. Roughly $ 1 billion has been raised and the gang of 10 has been disbursed – an outstanding result compared to many of the other large ticket credits they made in the 1980s.

Tricontinental did not have first class security and the losses were extensive.

In a classic control pyramid. Mr. Skase’s family business, Kahmea Investments, controlled Qintex Ltd, which controlled Qintex Australia Ltd., the owner of the resorts and television studios.

Tricontinental made its first loan to Mr. Skase’s empire at the beginning of its period of major expansion in the mid-1980s. The Qintex loans were soon so large that they violated Tricontinental’s internal regulatory guidelines, which set a limit of $ 75 million on Skase’s exposure.

In early 1986, Qintex owed Tricontinental more than $ 100 million, and as the investment boom continued, Tricontinental began funding Kahmea, which needed funds to maintain its controlling stake in Qintex.

By mid-1988, Tricontinental had loaned $ 79 million to a subsidiary of Qintex Australia, an additional $ 69.5 million to Qintex Ltd, which also had to borrow to maintain equity control over Qintex Australia Ltd – and $ 48 million Dollars to Kahmea.

The loans to Qintex and Kahmea were effectively secured by Mr Skase’s controlling stake in Qintex Australia and when things went bad the upstream lenders were stranded.

Tricontinental’s $ 69.5 million stake in Qintex Ltd was a write-off. The family business Kase’s $ 48 million commitment in Kaseea is now also a closed book. The Kahmea loans were part of Skase’s personal bankruptcy debt of $ 172 million, mainly owed to Tricontinental and HongKong Bank. Before going to Spain, Mr Skase declared a fortune of only $ 1,167.

The debt taken on by Mr. Skase in Kahmea funded his Qintex equity controls, and the money he used to pay his debts over the past few years has largely come from Qintex itself through the payment of management fees to Qintex Management Services.

The fees were approved by the board and were not in themselves illegal under the law of the time. They didn’t even have to be published in Qintex’s annual report. However, the amounts involved were substantial. Qintex Management paid Kahmea $ 12 million in 1988 and 1989, and Mr Skase stated the funds were used for loan interest and costs.

The fees, which are unlikely to be under review at this time, largely relate to the management payments made by Qintex Australia to the Management Company. Mr. Skase faced 32 corporate charges for abusing his position as Qintex executive to have Qintex pay just over $ 10 million to his family business, Kahmea.

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