Fall of Australia's guru of greed

By GREG ANSLEY


Rene Rivkin, the Cuban cigar-munching child of White Russian refugees from two communist revolutions, grins far less through his grey beard these days. Nor is he the media junkie of the past two decades.

Now he is its unwilling victim, brushing grim-faced past TV cameras and microphones on his way to his waiting Bentley, or hiding within his Point Piper mansion with its A$10 million ($11.4 million) views to the Sydney Opera House and Harbour Bridge.

This will be annus horribilis for Australia's most conspicuous stockbroker, still fighting last year's weekend jail sentence for insider trading. The New South Wales Department of Corrective Services on Thursday sent its recommendation on Rivkin's medical fitness to complete his nine-month term to the Commonwealth Director of Public Prosecutions. A decision is expected soon.

Far more serious for Rivkin is a new investigation into alleged trading in shares through secret Swiss accounts, possibly in contravention of Australian corporations and taxation laws. In a new climate of corporate puritanism, Rivkin is emerging as the target of choice for market regulators and taxation officials keen to gather high-profile heads for their widening campaign against white-collar miscreants.

Rivkin is just the man for their tumbril, a self-proclaimed "media nymphomaniac" once described as a human economic barometer, and a man instantly recognisable across Australia. For many, he is the face of the stockmarket. Even if they don't understand shares, they can understand Rene, his pretensions to bring wealth to the masses, and the soundbites that make greed seem the most virtuous of suburban values.

"It's much better to be unhappy and rich than unhappy and poor," he has often said. "If someone teaches me how to inconspicuously consume, I promise I will switch to inconspicuous consumption."

While "inconspicuous" is hardly a word that attaches itself easily to the 59-year-old Rivkin, it is becoming clear that the glare of his self-promotion concealed much about the man and much more about his business dealings.

He is also a contradiction within himself: while seeking and manipulating publicity to the hilt, tipping off paparazzi to his movements, hosting the rich and famous aboard his sinfully luxurious yacht and massaging journalists and TV hosts, he has an intensely private side.

His wife Gayle and his five children are shielded from the media, few are invited to a home where parties and A-list socialising are rarities, and friends and business associates are discouraged from discussing him in public.

But his conviction for insider trading and the flow of revelations about secret accounts and possible perjury are fast changing the benignly gnomic image of Rivkin as sharebroking's suburban messiah. Much that is unsavoury is emerging, including less-than-spotless members of an eccentric circle of friends and associates, and others whose reputations are equally at risk - among them former Senator and Labor Minister Graham Richardson, and prominent businessman Trevor Kennedy, both implicated with him in the Swiss affair.

Yet there also remains much to warm to in Rivkin's public persona: a grin that spreads easily across his jowly face and closely trimmed beard, an unashamed paunch, an easy, self-deprecatory wit, a charm that spans and wins the layers of Australian society, and an undisputed generosity.

He inspires fierce loyalty among his clients and friends.

Supporters swarmed to court to give mute testimony from the public gallery, or to attest to his character. Those who presented testimonials to the court that found him guilty of insider trading included radio talkback megastar Alan Jones, TV host Ray Martin, Australian Olympic Committee chief John Coates and former Labor Minister Laurie Brereton.

Business associate Nigel Littlewood told Business Review Weekly of sentiment in Rivkin's office: "There are probably four or five people here who would die for him. I'm one of them."

Rivkin himself sees his mounting woes as an inevitable conflict between an uncompromising personality and a culture that instinctively fells tall poppies: "Because I don't conform to the norm I have put people offside all my life and will continue to do so."

Rivkin, an atheist who embraces his Jewish roots but rejects its beliefs, could hardly avoid being different. Born in Shanghai, China, in 1944 to parents who escaped the Russian Revolution in 1917, he arrived in Australia in 1951 after the family fled the communist takeover of China.

Educated at Sydney Boys High and in law at Sydney University, he moved directly from varsity to stockbroker J & J Norris before quitting with colleague Michael Hobbs to form Hobbs Rivkin & Co.

This was the start of a rollercoaster that pushed Rivkin through the highs and extreme depths of successive market peaks and troughs, and the mental agonies of depression, eased later by the anti-depressive drug Prozac.

In 1983, after a market hammering and the election of the Hawke Labor Government that precipitated a temporary exile in London (he was later converted to Labor) Rivkin told the ABC's Search for Meaning show that for 12 months he was "in tears all day, hiding under the bedclothes and crying". In 1987 a brain tumour was removed.

His much later introduction to Prozac, he told Sydney's Daily Telegraph, changed his life: "Pre-Prozac it was much worse. I had a miserable life. I was suicidal."

Although not beginning well, the 1990s was the decade that made the modern Rivkin. His top-drawer friendships, with the likes of billionaire Kerry Packer, gave way to new thirtysomething Generation X pals and associates.

The dark days that saw him lose more than A$550,000 on the sale of his historic Victorian homestead, the failure of several companies, and unsuccessful plans to acquire insurer QBE and build golf courses and upmarket residential estates in Queensland, broke to a new dawn.

FAI Insurance chief Rodney Adler (now disgraced and barred from business for his part in the fall of insurance giant HIH) became a friend and Rivkin's biggest financier.

In 1992 Rivkin bought the struggling Offset Alpine Group from Kerry Packer for A$15.3 million. The following year it burnt to the ground, but to Rivkin's great advantage: FAI, which bought into the company two days before the fire, had insured the old plant, valued at A$3 million, for a replacement cost of A$42 million.

Within months FAI had made a total payment of A$53.2 million, the company's shares soared, and three years later it was sold for A$72 million.

One of the great ingredients of investment, Rivkin was to say frequently, is luck. Or so it seemed at the time, but more about Offset Alpine later.

Throughout the 90s Rivkin moved in and out of stockbroking and ventured into discount insurance and mortgages, watches and jewellery, real estate and The Cave nightclub in Sydney's Star City Casino, before setting up a final discount broking business in 2000.

His Generation X associates began attracting attention in themselves. Joe Elkham ran Joe's Cafe in Kings Cross when he met Rivkin, an establishment which, police were later to be told, did not have a good reputation.

Elkham believed this to be one of the reasons he was not allowed by the New South Wales Gaming Commission to be involved with Rivkin in The Cave - that, he said, and the fact that he was Lebanese, had a beard and drove a Ferrari.

Rivkin updated the Ferrari with a A$327,000 replacement to help ease Elkham's pain at the rejection. He also bought fashion designer Peter Morrissey a A$100,000 BMW when the pair went into business together and hired John Deerfield - a former undercover cop who had filed intelligence reports on Joe's Cafe before being hounded out of the force for dobbing in corrupt gaming squad officers - as his personal assistant.

But it was the move to sharemarket tipster, through newspaper columns and his newsletter, The Rivkin Report, which really cemented Rivkin in Australia's consciousness - that, and his vast and public love of the good life.

His closet holds 500 silk ties - for a man who more often than not appears in open-necked shirts - his garages stores 69 cars (many exotic and fantastically valuable), and he has homes in Sydney, Queensland and London, where he maintains a small staff and a chauffeur-driven Rolls-Royce.

His yacht Dajoshadia, an amalgam of his children's names, is moored in Rushcutter's Bay. It has a deck for his helicopter and is owned by a company whose mailing address is in the Virgin Islands.

When he tired of his Bellevue home three years ago, he put the lot on the market - house at A$8 million or so, contents at A$12 million. Rivkin wanted a clean slate to decorate the family's new home: Craig-y-mor, a A$10.5 million mansion with horizon-to-horizon views across Sydney Harbour.

But thunderclouds had been gathering above his head.

In 1998 newspaper reports linked Rivkin to the death of model Caroline Byrne, whose body was found at the foot of cliffs at The Gap in Sydney Harbour. The cause of death has never been established and is still being investigated.

Byrne's fiancee was Gordon Wood, at the time Rivkin's chauffeur and personal assistant. In defamation actions that are continuing, Rivkin claimed reports in Fairfax newspapers and the Seven Network suggested he had had a homosexual affair with Wood and had been implicated in murder.

In 2000, limits were placed on his stock trading activities after an Australian Securities and Investment Commission (ASIC) investigation confirmed that Rivkin had sold shares he had been advising his readers to buy.

Last year Rivkin was convicted of insider trading after he was told in confidence by Impulse Airlines founder Gerry McGowan that the company was about to be absorbed by Qantas. Rivkin bought and sold shares in Qantas as a result.

His trading produced a puny A$2600 profit and a net return to Rivkin of just A$350. But the charge was serious and one for which, Justice Anthony Whealy said, "there is a need to sound, in effect, a clarion call to discourage illegal and unethical behaviour".

Rivkin was fined A$30,000 and sentenced to spend every weekend for nine months at Silverwater Detention Centre. So far he has spent only one day there: on his first day he collapsed during a strip search and was taken to hospital.

Since then it has emerged that he suffered from hypomania, and has been treated for 10 years for bipolar disorder. Rivkin has also had benign brain tumours removed and, after suffering pancreatitis and gallstones, his gall bladder taken out.

All these are now being used as ammunition in his appeal.

But far more threatening is the investigation under way by ASIC, the Tax Office and the Australian Stock Exchange into revelations that, despite earlier denials, Rivkin has been holding and trading in stocks through secret Swiss accounts.

This takes us back to Offset Alpine. In 1993 regulators began investigating suspicious trading in the company's shares, and had been trying to find the owners of Alpine's controlling stake, held in the name of two Swiss banks. Their efforts were frustrated by obsessive Swiss secrecy laws.

But Rivkin's banker, Ernst Imfeld, was arrested in connection with a A$300 million embezzlement, requiring Rivkin to provide details of his dealings to prosecutors in Geneva.

In turn, an investigation by the Australian Financial Review revealed damning details of the involvement in Alpine of Rivkin, Richardson and Kennedy.

Among other details was an apparent conflict between Rivkin's sworn testimony to ASIC and his statement to Swiss authorities, which could involve perjury charges as well as serious breaches of companies and tax law.

Rivkin's 24 carat gold worry beads may now be his most useful investment.