Paradise Papers: The secret, handwritten deal to 'exploit' Michael Hutchence's estate

Updated

Secret documents have revealed a deal hatched in an offshore tax haven to cash in on the myth, the aura and music of rock star Michael Hutchence.

The documents also reveal for the first time a claim of total ownership over a key part of Hutchence's estate made by the performer's former lawyer, Colin Diamond.

An investigation by Four Corners raises serious questions about how Diamond came to own some of Hutchence's most personal belongings that were used in a recent Channel 7 documentary.

Those belongings include a diary and song lyrics left by Hutchence when he took his own life in a Double Bay hotel room 20 years ago.

"Everything of Michael's in the room of the hotel was taken two days later by Colin Diamond," Michael's brother, Rhett Hutchence, told Four Corners.

"None of that stuff has ever been released to the family."

How much money, if any, from newly-released music publicised in the Channel 7 documentary goes to Hutchence's 21-year-old daughter, Tiger Lily Hutchence, remains deeply unclear.

Inside the secret documents

The documents showing Diamond's claim to be the "ultimate beneficial owner" of Hutchence's estate have been revealed in the Paradise Papers leak from the law firm Appleby and other offshore service providers.

The investigation involves Four Corners working in partnership with the International Consortium of Investigative Journalists and other media partners, reviewing more than 13 million documents obtained by German newspaper Suddeutsche Zeitung.

The three-page handwritten document shows that a company called Helipad Plain was formed in the tax haven of Mauritius in late 2015, in a deal between Diamond and music entrepreneur Ron Creevey.

As you can see mapped out in one of the pages of the document, Creevey's involvement through the company Moment Media brought with it a colourful cast of characters as fellow investors.

Those investors included:

Margaret Staltaro, the finance officer to the self-described "King of the Cross", John Ibrahim.

Ibrahim — a friend of Ron Creevey's — is also an investor in Moment Media through his company Edge Point Holdings.

Lyndi Adler, through her ownership of Jaronach. Lyndi Adler is the wife of Rodney Adler, the high-flying businessman whose fortunes crumbled in the early 2000s with the collapse of HIH insurance.

English property investor Nigel Wray, best known as chair of the London rugby union team the Saracens. He is an investor through Euroblue Investments – a company he owns through another company registered in the tax haven of Malta.

Peregrine Crosthwaite, a director of Investec Bank, the London Stock Exchange-listed offshoot of the high-powered global investment bank Investec.

And Bob Mansfield, a former chief executive of Fairfax Media and former chair of Telstra who is a keen tech investor and currently on the board of telco Vocus Communications.

Four Corners has been told Moment Media investors were unaware Ibrahim was a co-investor, and they were also unaware they were being signed up to the joint venture in Mauritius.

Helipad Plain's company's stated aim was the "commercial exploitation of the sound recordings, images, films and related materials embodying the performance of Michael Hutchence".

The man claiming the estate

Lawyer Colin Diamond first became involved with Hutchence in Hong Kong when the rock star started placing his assets in complicated offshore trusts to avoid tax in the 80s and 90s.

Hutchence's music rights were held through a British Virgin Islands company called Chardonnay Investments.

Diamond took centre stage in Seven's recent documentary, in which he discussed the diary left in the hotel room after Hutchence's death.

"I have held on to it for Tiger for many years," Diamond said.

The Seven documentary explained Diamond had the diary and sensitive personal documents from Hutchence's hotel room because he was Hutchence's friend and co-executor of his will.

Rhett Hutchence told Four Corners: "Two days after Michael died, Colin Diamond went into the Rose Bay Police Station, acting as Michael's attorney, and took hold of all of Michael's possessions that he had with him in Australia.

"He kindly left the belt that Michael used for my father to pick up.

"My father was — I mean, the whole family was completely shocked that he had actually taken all this stuff.

"That should have been part of the estate. It's the family stuff."

The documentary did not explain exactly how Diamond came to be the man who controls Hutchence's estate.

Michael Hutchence had made Diamond executor of his will, partly because of the difficult relationships in his close family.

According to Rhett Hutchence, his brother's wishes were to split any money from the estate, with half going to Tiger Lily, then 10 per cent each to partner Paula Yates, father Kelland Hutchence, mother Patricia Glassop, sister Tina and brother Rhett.

The Appleby documents tell a different story about a key part of the estate, the music rights.

The documents include an email from a Singaporean lawyer, Malcolm Lim, acting for Diamond. The email states that all intellectual property rights in Michael Hutchence's estate belonged to Chardonnay Investments, and therefore belonged to Diamond who became Chadonnay Investment's sole owner after Hutchence's death.

Mr Lim wrote: "The reason for this is that he was a trusted friend of Michael Hutchence and because of that and the fact that he (MH) had various family issues, he left Colin Diamond to deal with the assets of Chardonnay."

When Appleby looked at the joint venture between Diamond and Creevey in Mauritius they marked it "high risk", but went on to incorporate the company.

Hutchence's missing millions

Diamond's claims on Hutchence — before and after his death — were controversial when Diamond first acted as a lawyer to Hutchence.

"I think pretty early on he was problematic. Chris Murphy, the band's manager at the time, advised them that he was not to be trusted, and this was not the way to go," said veteran rock journalist and a biographer of Hutchence, Toby Creswell.

"He was just, like, the toughest guy in the jungle really. And he was going to outlast anybody else who was going to get in the way of the fortune."

Michael's late mother, Patricia Glassop pursued the estate's assets held in labyrinthine offshore structures through the Queensland Supreme Court, naming Diamond and others as defendants.

There were no answers forthcoming about the complicated offshore legal structures that held three Gold Coast properties, a villa in France, a house in Chelsea or a development in Lombok.

All these properties were reputedly owned by Hutchence, but his ownership rights were never established.

The case ended in 1999 with a settlement that was reportedly not enough to cover the family's $500,000 in court costs.

In 2005, Glassop was told by a law firm that Hutchence's estate was worth zero.

However there was still value in the rights to Hutchence's music.

In 2008, Michael Hutchence's share in the rights to INXS's music were sold for a figure understood to be in the millions, with the proceeds going to Chardonnay Investments.

The music entrepreneur

Music entrepreneur Ron Creevey's Moment Media - with its rich assortment of Ibrahim, Staltaro and other investors - was the partner with Diamond's Chardonnay Investments in the joint venture set up through Mauritius, and therefore poised to reap any benefits of the Hutchence deals.

Four Corners can reveal documents relating to Moment Media were sought in search warrants issued by Australian Federal Police in a widely-publicised swoop on John Ibrahim's home and others, in an investigation into an international drug and money laundering syndicate.

Ibrahim was not charged after the raids.

A knock-down, get-back-up-again entrepreneur, Creevey first came to attention in the early 2000s catering business The Cabinet, which boasted Luna Park as a key customer and Sydney entertainment baron Justin Hemmes as an investor.

In 2005, the company went bust, owing debts of $16 million and pushing Creevey into bankruptcy.

But Creevey bounced back, styling himself as a tech entrepreneur and playing a role in the float of Singapore social media company Yuuzoo.

Creevey now finds himself as a defendant in a US securities fraud case relating to the float.

The case alleges investors were not told the company's revenues relied extensively on deals with related parties owned by Creevey or his partner in the failed catering business, Mark Cramer-Roberts. Creevey and Cramer-Roberts deny any wrongdoing.

Creevey has also received some press after his multimedia broadcast studio-come-nightclub, Studio X, was shut in Kings Cross recently, leading to reports of aggrieved creditors.

It was earlier reported he settled a dispute with media personality Sophie Monk, who had claimed she was only paid half her agreed $200,000 fee to promote the club.

Big plans

One of Creevey's big plans for Helipad Plain was making money out of a documentary to mark the 20th anniversary of Hutchence's death.

Channel 7 said Creevey had told its reporter about Hutchence's previously unreleased music, and put Channel 7 in touch with Diamond.

Offerings in a "prospectus" last December from another company founded by Creevey were 15 unreleased songs, a re-release of a digitally remixed solo album, "80 per cent of the global rights", and "contributing to a full-length feature film, 'The Loved One' on Michael's life".

The prospectus claimed $1.25 million had been netted from documentary rights relating to Hutchence from a "media company".

However Creevey now says the prospectus was incorrect.

"No money ever has flowed from Seven to any of the companies I am related to," Creevey said in an emailed response to Four Corners' letter.

Channel 7 told Four Corners the documentary appreciated but did not rely on Creevey's input and it did not pay for any of the material used in the documentary.

It agreed to promote the new music from Hutchence in the documentary, with the rights owned by Diamond.

Does anything go to Tiger Lily?

On the question of whether Tiger Lily would receive any money at all, Creevey told Four Corners: "My understanding is that Colin Diamond is well disposed to Tiger Lily and discusses matters with her, but that is between them ... I am no longer involved in the unreleased music side of things."

For veteran music writer Toby Creswell, who estimates the estate's royalties and share of royalties from INXS would be in the tens of millions of dollars over the past 20 years, it is a case of the same old story.

"As I understand it, there's a lot of stuff that's supposedly done for Tiger, which actually isn't really," he said.

Four Corners has learned from several sources that Tiger Lily has received some money from Diamond but nothing like the full value of her father's rights.

Diamond has not responded to repeated inquiries to his representatives.

A representative of Tiger Lily Hutchence declined to comment.

"I think it's about time we had a platform and told what's been going on, because it's, it's injustice, you know?" Rhett Hutchence said.

"What has happened is injustice."

Credits

Image credits

Header image: AAP, Seven Network, Lyndi Adler AAP, Mick Tsikas, Bob Mansfield AAP: Mick Tsikas, Nigel Wray Getty: Mike Egerton/PA Images, Margaret Staltaro News Corp Australia: John Grainger, Michael Hutchence AAP/Powerhouse Museum: Tony Mott, Michael Hutchence and Tiger Lily AAP/Seven Network

Topics: tax, fraud-and-corporate-crime, music-industry, rock, bands-and-artists, business-economics-and-finance, australia

First posted