John McGrath has denied his gambling debts are out of control or in any way linked to his stake in his embattled real estate business.
Shares in McGrath Ltd were placed in a trading halt on Thursday as the company sought further information from its founder related to recent media reports about Mr McGrath, who remains a major shareholder.
Fairfax Media has claimed Mr McGrath has $16.2 million in gambling debts with betting company William Hill Australia.
And a report from News Corp’s The Australian claimed Mr McGrath has a $100 million margin lending facility connected to a private investment company.
McGrath Ltd advised the ASX on February 8 that Mr McGrath had confirmed there was no margin lending facility related to his stake in the company, nor had the shares been used as security for a loan.
Late on Thursday, Mr McGrath released a statement in which he said “ridiculous recent press coverage” was distracting attention from the important work of the company.
“Like many Australians, I enjoy a punt,” he said.
“I have a credit account with a bookmaker for this purpose.
“That account is not secured by, or otherwise connected with, my shares in the company.”
Mr McGrath, whose stake in the company is currently worth $15.8 million, said the gambling account was well within his means, in the context of his net wealth, and he was in full compliance with the terms of the account.
“I have never, and would never, let what I might choose to do in my personal time impact upon the company,” he said.
McGrath Ltd on Thursday posted a net loss of $25.5 million for the six months to December 31, due to significant impairments and ongoing troubles with lower volume listings, a decrease in its real estate agent numbers and a fall in the number of properties under its management.
Mr McGrath is taking on the role of chief executive and chairman as part of a senior management and boardroom cleanout announced in January.
Current CEO Cameron Judson, chairman Cass O’Connor and the rest of the board will leave the business by February 19.
Mr Judson denied there has been a mass exodus and said the changes put the company on a lower cost base.
“We clearly had to address costs in the organisation, which is why we announced on November 6 last year that we will take $5 million of the costs out,” he said.
“Certain capabilities, including myself, are probably oversized for this organisation.”
McGrath has also taken a $21.8 million hit in goodwill to the company-owned sales business and a $1.1 million goodwill impairment of its property management rights.
Shares in McGrath last traded at 42.5 cents – well below its $2.10 offer price in December, 2015.
MCGRATH POSTS FIRST HALF LOSS
* Statutory net loss of $25.5m, vs $2.7m profit
* Revenue down 23pct to $51.6m
* No interim dividend, vs 1.0 cent fully franked