Richard Pratt (Australian businessman)

Richard Pratt (Australian businessman)
Richard Pratt
Born 10 December 1934(1934-12-10)
Free City of Danzig (modern Gdańsk), Poland
Died 28 April 2009(2009-04-28) (aged 74)
Kew, Melbourne, Victoria, Australia
Nationality Australia Australian
Other names Ryszard Przecicki
Known for Businessman, President of Carlton
Net worth decrease A$1.5 billion (2009)[1]
Religion Judaism
Spouse Jeanne
Children 4

Richard J. Pratt (born Ryszard Przecicki; 10 December 1934 – 28 April 2009)[1][2] was a prominent Australian businessman, chairman of the privately-owned company Visy Industries, and a leading figure of Melbourne society. In the year before his death Pratt was Australia's fourth-richest person, with a personal fortune valued at A$5.48 billion.[3] Pratt was appointed an Officer and later a Companion of the Order of Australia, however, he returned his awards in February 2008 after he was fined $36 million for price fixing.[4]

Contents

Early life

Pratt was born in the Free City of Danzig (modern Gdańsk), Poland of Polish Jewish parents on 10 December 1934.[1] His family emigrated to Australia in 1938 and settled in Shepparton, Victoria, changing their surname from Przecicki to Pratt. Pratt was educated at Grahamvale Primary School, Shepparton High School and University High School and enrolled in a Bachelor of Commerce degree at the University of Melbourne in 1953.[5] He also played Australian rules football, as a ruckman. After starting his career at Lemnos (now the Shepparton Swans), Pratt played for Carlton in the Victorian Football League's (VFL) under-19s competition. He was awarded the Morrish Medal in 1953 for being deemed the "best and fairest" U-19 player that year.[6] Pratt did not continue his footballing career to senior VFL level, instead focusing on other interests.

Pratt combined study with acting and working as salesman for the family business, Visy Board. After touring London and New York with a production of Ray Lawler's Summer of the Seventeenth Doll, he returned to Melbourne and Visy. Following the death of his father Leon in February 1969 Pratt took over his father's business, which at that time had several hundred employees and an annual turnover of A$5 million.[7]

Business career

Under Pratt’s direction, Visy expanded from two factories in Melbourne to more than 55 plants across Australia, United States, New Zealand, and Papua New Guinea. From cardboard boxes and packaging, Visy moved into waste paper recycling. Later in the 1990s Pratt expanded his operations considerably into the New York waste paper business.

In 1993 the National Crime Authority (NCA) raided Pratt's offices in connection with an investigation into businessman John Elliott's foreign exchange dealings and Elliott's spoiling domestic stake in Broken Hill Proprietary Company (BHP, now BHP Billiton) while Elliott's company, Elders IXL, was insolvent.[8][dead link] The following year, NCA paid costs and returned documents seized.[citation needed]

Also in the 1990s, Visy was ordered by the Australian Competition and Consumer Commission (ACCC) to pay a half million dollar fine for illegal anti-competitive behaviour.[9]

On 16 May 2007, he was awarded the Woodrow Wilson Medal for Corporate Citizenship.[10] This is given to executives who,

...by their examples and their business practices, have shown a deep concern for the common good beyond the bottom line. They are at the forefront of the idea that private firms should be good citizens in their own neighborhoods and in the world at large[10]

Public career

As well as his business interests, Pratt was known for his involvement in public service, having held posts including: foundation chancellor of Swinburne University of Technology, president of the Victorian Arts Centre Trust, and Chairman of the Board of Management of the Mental Health Research Institute of Victoria.

Through the Pratt Foundation, the Pratt family are among Australia's leading philanthropists donating up to A$10 million a year. Pratt was named Environmental Visionary of the Year in 1998 by the Keep Australia Beautiful Campaign. Pratt was appointed Officer of the Order of Australia (AO) in 1985, and Companion of the Order of Australia (AC), Australia's highest honour, in 1998. His wife, Jeanne, is also an AC recipient.[11]

On 8 February 2007 he was appointed president of the Carlton Football Club. On 20 June 2008 the Carlton Football Club announced that Richard Pratt would stand aside from the club until the charges of giving false and misleading evidence to an Australian Competition and Consumer Commission hearing were resolved.[12]

Pratt also donated considerable funds to both major political parties (for example A$300,000 in Financial Year 2003-4),[13] as well as to former Australian Prime Minister John Howard's Liberal government.[14] In 1996 an investigation by The Australian newspaper documented from internal company documents that Pratt maintained a multi-million-dollar network of advisors.[8][dead link] This included an $8,333.33 a month fee to Bob Hawke for consultation on "Asian and government matters", $27,220.03 for travel to the US for Gough Whitlam as business adviser on overseas markets, and other sums for former state premiers Nick Greiner and Rupert Hamer.[8][dead link]

Personal life

Richard Pratt was married to Jeanne Pratt (née Lasker) for nearly 50 years. After the success of Visy Industries, they enjoyed a lavish lifestyle, with a private jet and a range of apartments, including a penthouse at the Sherry-Netherland Hotel in New York City;[15] their main home was the historic mansion Raheen, in the Melbourne suburb of Kew,[8][dead link] the former residence of Roman Catholic Archbishop Daniel Mannix.[15] The Pratts had three grown children, Anthony, Heloise and Fiona.

Another daughter, Paula, was born in 1997 to his longtime mistress, Sydney socialite Shari-Lea Hitchcock.[16] In 2000 this affair became the subject of widespread media attention owing to a court case involving Ms Hitchcock and a nanny hired to look after her daughter. At the time, Mr Pratt was accused of trying to pay hush money to the nanny who had launched legal action against Ms Hitchcock.[17]

After a well-publicised battle with prostate cancer, Richard Pratt died at his Kew residence on 28 April 2009,[2] the day after all charges against him had been dropped due to his ill-health.

Philanthropy

He donated $10 million every year through the Pratt Foundation to refugees, artists and others.[18]

Conviction for price fixing

In December 2005 the ACCC commenced a civil penalty proceeding against Visy companies, Pratt, and others, for alleged involvement in a cartel in the packaging industry.[8][19]

On 10 October 2007, Richard Pratt was formally accused of price fixing, cheating customers and companies out of approximately A$700 million in the nation's biggest-ever cartel case.[20] The ACCC alleged "very serious contraventions" of the law and that these had been "carefully and deliberately concealed" by Visy senior executives.[21] The ACCC counsel further stated:

"There can be no suggestion that Visy acted in ignorance of its obligations under the act,"[22]

and further added that the deliberate use of pre-paid mobile phones that could not be traced and the holding of meetings in private homes, motel rooms and suburban parks

"...provides a strong indication that Visy was fully aware that the conduct was illegal".[22]

After more than a year of denials Pratt subsequently admitted his guilt, acknowledging he and his company, and "rival" company Amcor deliberately broke the law.[23] Pratt was aggrieved by the criminal prosecution and its effect on his reputation, stating:

"I feel very angry—Visy is seen as Richard Pratt's company—there is a certain amount of character assassination for me personally because I am a tall poppy in the community; it's a big scalp (for the ACCC). My reputation is something I have been building for 50 years and so I am worried that the general public will now see me as a rich person who has made his money doing something that is wrong in the eyes of the law."[23]

On 2 November 2007, Pratt and the Visy group received a A$36 million fine, representing both the largest fine in Australian history and an estimated 0.75% of the Pratt fortune.[9][24][25] Federal Court judge Justice Heerey said Mr Pratt and his senior executives were knowingly concerned in the cartel, which involved price fixing and market sharing.[24] "This is the worst cartel to come before the courts in 30-plus years," Justice Heerey said.

Additionally, customers of Visy have initiated claims against Visy and Amcor, including a $120 million suit by Cadbury Schweppes against Amcor.[9]

Criminal prosecution for impropriety

On 19 June 2008, Pratt was charged with lying about his knowledge of a price-fixing scandal.[26] Mr Pratt had been facing four separate charges under Section 5 of the Act, the penalty for each charge ranges from a fine of $2,200 to 12 months' jail.[citation needed]

On 27 April 2009, this criminal prosecution of Pratt for charges of impropriety (lying to the ACCC during its successful investigation into the Visy/Amcor price fixing scandal) were abandoned on account of his poor health and impending death. However, Commonwealth Prosecutor Mark Dean SC told the Federal Court the Commonwealth Director of Public Prosecutions (CDPP) believed the prosecution would have succeeded.[27] Pratt died the following day.

References

  1. ^ a b Schulz, Matthew (2009-04-28). "Life and times of Richard Pratt". Herald Sun. http://www.news.com.au/heraldsun/story/0,21985,25366289-2862,00.html. Retrieved 2009-04-28. 
  2. ^ a b "billionaire Richard Pratt dies after prostate cancer battle". News.com.au. 2009-04-28. http://www.news.com.au/story/0,27574,25400857-421,00.html. Retrieved 2009-04-28. 
  3. ^ Chappell, Trevor (2008-05-28). "Alan Bond makes BRW rich list comeback". Australian Associated Press (News.com.au). http://www.news.com.au/business/story/0,23636,23772566-462,00.html. Retrieved 2009-04-29. 
  4. ^ "Gazette, Special S 40, 22 February 2008". Commonwealth of Australia. Attorney-General's Department. 2008-02-22. http://www.ag.gov.au/portal/govgazonline.nsf/6D34A6DE20D370DFCA2573F70002A99C/$file/S%2040.pdf. Retrieved 2009-04-29. 
  5. ^ "Richard Pratt". University Secretary's Office, University of Melbourne. 2004. Archived from the original on 29 August 2006. http://web.archive.org/web/20060829195748/http://www.unimelb.edu.au/ExecServ/honcausa/citation/pratt.html. Retrieved 2007-03-17. 
  6. ^ "Morrish Medal". AFL. Bigpond. http://www.afl.com.au/morrish%20medal/tabid/270/default.aspx. Retrieved 2009-04-28. 
  7. ^ "Visy History". Visy. http://www.visy.com.au/?id=90. Retrieved 2009-04-29. 
  8. ^ a b c d e "Boxed-in billionaire". News.com.au. http://www.news.com.au/business/story/0,23636,17635736-14334,00.html. Retrieved 2009-04-29. [dead link]
  9. ^ a b c Washington, Stuart (2007-08-13). "Who really foots the bill for Pratt's philanthropy?". Melbourne: The Age. http://www.theage.com.au/news/business/who-really-foots-the-bill-for-pratts-philanthropy/2007/10/12/1191696178506.html?page=fullpage#contentSwap2. Retrieved 2009-04-29. 
  10. ^ a b "Woodrow Wilson Awards". Wilson Center. http://www.wilsoncenter.org/index.cfm?fuseaction=awards.awards. Retrieved 2009-04-29. 
  11. ^ Companion of the Order of Australia: PRATT, Jeanne, 10 June 2002. For outstanding leadership in the arts, for development of opportunities for young artistic talent on stage and in the orchestral field, and for service to the community through charitable and non-profit organisations.
  12. ^ Spits, Scott (2008-06-20). "Pratt stands aside as Carlton chief". Sydney Morning Herald. http://www.smh.com.au/news/national/pratt-stands-aside-as-carlton-chief/2008/06/20/1213770889110.html. Retrieved 2009-04-29. 
  13. ^ "Pratt Holdings Pty Ltd 2003/4". Australian Electoral Commission. http://fadar.aec.gov.au/arwDefault.asp?SubmissionID=6&MainFrameURL=arwDonor%2Easp%3FSubmissionID%3D6%26ClientID%3D1372. Retrieved 2009-04-29. [dead link]
  14. ^ Murphy, Katharine (2007-08-17). "Howard to keep Pratt's donations". Brisbane: The Age. http://www.theage.com.au/news/federalelection2007/howard-to-keep-pratt-donations/2007/10/17/1192300841137.html. Retrieved 2009-04-29. 
  15. ^ a b Kirby, James; Stephens, Tony (2009-04-29). "Tycoon with an immense, combative energy". Sydney Morning Herald. http://www.smh.com.au/national/obituaries/tycoon-with-an-immense-combative-energy-20090428-alzn.html?page=-1. Retrieved 2009-04-29. 
  16. ^ Hornery, Andrew; Cubby, Ben (2005-06-27). "Space invaders". Sydney Morning Herald. http://www.smh.com.au/news/spike/space-invaders/2005/06/26/1119724527096.html. Retrieved 2009-04-29. 
  17. ^ "Couple speak out on mistress". The Australian (News.com.au). 2007-08-07. http://www.news.com.au/story/0,23599,22540312-2,00.html. Retrieved 2009-04-29. 
  18. ^ http://www.richardpratttribute.com/
  19. ^ Proceeding VID 1650 of 2005 in the Federal Court of Australia, www.austlii.edu.au
  20. ^ Binnie, Craig; Royall, Ian, Whinnett, Ellen, Mickelburough, Peter (2007-08-10). "Richard Pratt cardboard deal may have cost $700m". Herald Sun. http://www.news.com.au/heraldsun/story/0,21985,22560327-2862,00.html. Retrieved 2009-04-29. 
  21. ^ Stewart, Cameron (2007-08-17). "Pratt buttoned up and beaten". The Australian. http://www.theaustralian.news.com.au/story/0,25197,22599836-601,00.html. Retrieved 2009-04-29. 
  22. ^ a b Speedy, Blair (2007-08-17). "Watchdog puts $36m bite on Pratt". The Australian. http://www.theaustralian.news.com.au/story/0,25197,22599425-5013404,00.html. Retrieved 2009-04-29. 
  23. ^ a b Stewart, Cameron (2007-08-06). "Richard Pratt to admit breaking law". The Australian. http://www.theaustralian.news.com.au/story/0,25197,22539478-601,00.html. Retrieved 2009-04-29. 
  24. ^ a b "Pratt, Visy fined $36m". Adelaide Now. 2007-11-02. http://www.news.com.au/adelaidenow/story/0,22606,22690569-911,00.html. Retrieved 2009-04-29. 
  25. ^ "Visy in $300m cartel class action suit". NineMSN. 2007-11-29. http://news.ninemsn.com.au/article.aspx?id=72669. Retrieved 2009-04-29. 
  26. ^ Ross, Norrie (2008-06-20). "billionaire Dick Pratt faces jail". Herald Sun. http://www.news.com.au/heraldsun/story/0,21985,23892386-2862,00.html. Retrieved 2009-04-29.  News.com.au: billionaire Dick Pratt faces jail]
  27. ^ "billionaire Richard Pratt dies of prostate cancer". Australian Associated Press (The Australian). 2009-04-28. http://www.theaustralian.news.com.au/story/0,25197,25401026-601,00.html. Retrieved 2009-04-28. 

External links

Sporting positions
Preceded by
Graham Smorgon		 Carlton Football Club president
2007–2008		 Succeeded by
Stephen Kernahan
v · d · eBusiness in Australia
Institutions
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Major companies
Corporate controversies
and collapses
Ansett Australia · Bridgecorp Holdings · Firepower International · Great Southern Group · James Hardie asbestos controversy · Rodney Adler, Ray Williams and the collapse of HIH · Opes Prime · Pasminco becomes Zinifex · Poseidon bubble · Price fixing in the packaging industry · Rene Rivkin and the Offset Alpine fire · Jodee Rich and One.Tel · Christopher Skase · Storm Financial · WA Inc · Westpoint · Timbercorp
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