04 | Bondy | Inside the boy's club

With his hands deep in the West Australian government ‘s coffers, a chance meeting with a man named Tiny could spell the beginning of the end for Alan ‘Bondy’ Bond. The Black Monday stock market crash sends shock waves through the world economy, threatening to turn Bondy’s business empire upside down. With everything on the line, Bond needs to act fast but his recklessness catches the attention of his enemies, who seize the opportunity to bring him down. This is episode 4 of a 6-part history podcast series for ABC Rewind from Radio National and the Australian Broadcasting Corporation.

• 0:00Speaker 00

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  There are a lot of perfectly sensible reasons to start a war. Territory, resources, pigs. Wait, what?

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  You've got to pay for that pig.

• 0:15Speaker 01

  Yes, a pig, a pastry shop, a football game, sometimes even birds.

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  They don't seem to be easy to kill.

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  History is filled with some stupid wars. On the No One Saw It Coming podcast, we are diving right into them with me, Mark Vonnell.

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  Search No One Saw It Coming podcast on ABC Listen or wherever you get your podcasts.

• 0:38Speaker 03

  It's early Friday morning, well before business hours on the 23rd of October 1987. An angry mob is swelling out the front of a bank in Perth CBD. They're shouting, banging on the front doors, but they're locked out. Security guards flank the entrance. They've been ordered to keep the mob at bay by any means necessary. This bank isn't your typical bank. It's a merchant bank called Rothwell's, a bank that mostly lends to businesses. And the angry mob, they're investors desperate to get inside and get their money out.

• 1:16Speaker 03

  Because just a few days earlier, the unthinkable happened.

• 1:19Speaker 04

  It's horrific, it is panic, and there's no signs of it stopping at the moment. I have to say, it's a bloodbath.

• 1:26Speaker 03

  The global stock market crashed.

• 1:28Speaker 04

  No sector of the market was spared, with capital gains amassed over many years being wiped out in just one day.

• 1:35Speaker 03

  Perth journalist Peter Kennedy is there, watching the madness unfold.

• 1:40Speaker 05

  It's like the depression era that we used to read about and think this will never happen again.

• 1:44Speaker 06

  No one has ever seen falls of this magnitude anywhere, anytime in the history of financial markets. Not 29. Not even 1929.

• 1:52Speaker 03

  Rothwell's is in a serious pickle. It's taken huge risks with investors' money. And when that mob rocks up demanding it back, there's not much of it left to give.

• 2:03Speaker 05

  So many West Australian institutions had big investments in Rothwell's. Some big local government bodies, some of the private schools had significant amounts in there, the Catholic Church, as well as just ordinary investors.

• 2:19Speaker 03

  The Catholic Church, lucky they don't pay income tax, otherwise they'd really be in trouble. The panic is infectious. If Rothwell's goes down, it could be the domino that sets off a chain of bank collapses. And that would be catastrophic. So Rothwell's needs bailing out and fast.

• 2:42Speaker 03

  And who should put up their hand to lead the rescue? None other than our Bondi. Billionaire businessman, national hero for winning the America's Cup. But settle down, if you think Bondi's stepping up to save Rothwell's out of the goodness of his heart, you're dead wrong. Alan Bond always has an ulterior motive. In this case, he's cooked up a dodgy plan to profit from someone else's crisis. Of course he has. This time though, Bond might have bitten off more than he can chew. I'm Mark Humphries and from ABC Rewind, this is Bondi, From Hero to Zero, episode four, Inside the Boys Club.

• 3:36Speaker 03

  When the stock market goes into freefall, Alan Bond's in Rome on a business trip. But his old mate, Rothwell's chairman, Laurie Connell, gets straight on the phone to him. Connell is desperate. He needs a $300 million bailout and he needs it now. Bondi immediately jumps on a plane back to Perth and heads straight from the airport to meet Connell at Rothwell's HQ in the city.

• 4:03Speaker 03

  Now Laurie's an interesting cat. He's another one of those high-flying 80s corporate cowboys. He's loud, ruthlessly opportunistic, and frankly, a bit dodgy. Note to self, could be good subject for future podcast.

• 4:19Speaker 04

  Laurie Connell was, in the old lingo, a shyster, what we'd today just call a crook, a con man.

• 4:26Speaker 03

  Definitely podcast worthy. But back in the 80s, Bond and Connell are tight, part of the Boys Club, the master networkers that dominate Perth's business world. And author Quentin Beresford says Alan and Laurie are cut from the same cloth, that they share a taste for the finer things.

• 4:44Speaker 04

  He was also a big racehorse owner. He reputed to have owned 400 racehorses. It'd be nothing for him to shout a group of friends, sometimes hundreds of bottles of French champagne. It was said that he kept $100,000 in his wallet on the weekends, just to spare change to pay for his lifestyle.

• 5:04Speaker 03

  God knows how he managed to sit down with that in his back pocket. Now, whereas Bondi looks for people to borrow cash from, Connell looks for people to lend money to. It's a marriage of convenience.

• 5:17Speaker 04

  He was a lender of last resort. Last resort Laurie, he was called by some. That is, people could come in, get money quickly, not too many questions asked, not too much paperwork to attend to and walk out in half an hour. Laurie charged high interest rates for that convenience. The bank is functioning like a Ponzi scheme.

• 5:38Speaker 03

  And this is the guy Bond's rescuing from financial disaster? Usually rats flee a sinking ship, but in this case, it looks like they've decided to take the wheel.

• 5:51Speaker 03

  Rothwell's is only five years old, and basically it's lent out more money than it should have. So when investors freak out on that Friday morning after the crash and try to withdraw their money, well, there isn't enough in the bank, so to speak, to give them. Which leads us back to Rothwell's Perth HQ, where Laurie and Bondi are having crisis talks.

• 6:14Speaker 03

  Now Connell's infamous for taking centre stage in meetings, but today, he shrinks into the background. Journalist Peter Kennedy says it's Bond who takes control.

• 6:24Speaker 05

  Alan Bond was the organizer of the Rothwell's rescue of a who's who of Australian investors to put money into it, to prop it up, to keep it going. He had very good contacts and didn't take no for an answer.

• 6:42Speaker 03

  Bond works the phones, using his charm to convince Australia's richest businessman to help keep his mate's bank afloat. Because if it collapses, the ripple effect will devastate Australian markets. And the plan works. The who's who, Kerry Packer, John Elliott, Robert Holmes Accord, Bondi and a bunch of others stump up $150 million. They're halfway there. Then Alan hits someone else up for the rest, the Labor Premier of Western Australia, Brian Burke. Burke and Bondi have history.

• 7:20Speaker 05

  Someone said to me, the worst thing that could have happened to that government happened 1983. It happened at Newport, Rhode Island. With that America's Cup victory, Bond was a national hero. It was very hard for any government to say no to Bond, let alone a new government in his home state, led by a very young premier.

• 7:46Speaker 03

  When the young Brian Burke first becomes premier in 1983, he's determined to make WA an entrepreneurial state. Laurie Connell introduces him to his mate Bondi, and Alan wastes no time spruiking deals to Burke for the state to invest in. But Burke's first meeting with Alan Bond, let's just say it doesn't go well.

• 8:07Speaker 04

  He came to see me and spent half an hour lecturing me on how to run the government and the role that he thought the Bond Corporation could play in that running of the government. Any assets the government wanted developed, Bond Corporation could do. So I was a bit taken aback and not all that pleased with the meeting.

• 8:33Speaker 03

  Weirdly, that doesn't stop the Burke government doing a deal with Bond and Connell in Burke's first year in office. It buys a 5% stake in the Argyle Diamond Mine in the Kimberley, wanting the state to benefit from the resources boom, which, according to journalist Paul Barry.

• 8:50Speaker 02

  That was a scandal anyway, the fact that it was, I mean, why on earth was the state buying a share in Diamond Mine? God knows.

• 8:56Speaker 03

  Those sparkling diamonds blind the Burke government. A royal commission will later find it buys Bondi's share for more than the market value. And then crucially, what Burke doesn't tell his cabinet before it approves the purchase is that Connell, who is advising the government on the price, is also a paid advisor to Bond.

• 9:18Speaker 04

  Connell creamed off a consultancy for over a few million to get the deal done. And the deal done was eye-wateringly advantageous to Alan Bond.

• 9:28Speaker 03

  Safe to say, it won't be the only transaction between Bond, Connell and the Burke government to come under scrutiny.

• 9:35Speaker 04

  There was a petrochemical plant, their energy deals, the mining deals. It really signified the emergence of a new form of government in Australia, what I call chronic capitalism, which is governments developing close relationships with businessmen and corporations for mutual advantage.

• 9:58Speaker 03

  You're going to hear about the absolute shitstorm these deals create later in the series, when a royal commission puts them under the microscope.

• 10:07Speaker 03

  But for now, back to the Rothwell's rescue, where Brian Burke is convinced the government needs to step in and help save the merchant bank.

• 10:16Speaker 04

  Letting Rothwell's collapse would not be good for the

• 10:19Speaker 05

  Financial markets or for the business world. If Rothwell's failed, then there'd be all sorts of repercussions across the community. So Burke's argument was that this government couldn't afford for Rothwell's to fail.

• 10:35Speaker 03

  And so, with a few conditions, the West Australian government is in. The rescue is a done deal.

• 10:42Speaker 00

  The rescue of Rothwell's was complete. Rothwell's debts were paid.

• 10:47Speaker 04

  Another $150 million in bank credit has been guaranteed by the West Australian government.

• 10:52Speaker 03

  Chairman Laurie Connell sings the praises of his rescuers, especially Brian Burke.

• 10:57Speaker 04

  No regrets at all, other than to say that I probably wished that Brian Burke had been the President of the United States of America.

• 11:06Speaker 03

  But, and here's the crunch, there are things you need to know about this Rothwell's rescue. First, Laurie Connell hasn't exactly been honest with his saviors about the state of the bank's finances. Truth is, it's in dire straits. Connell's been secretly siphoning money out of Rothwell's for years to prop up his other businesses. And second, Bondi's pitched $17 million into the rescue, but then he secretly pays himself a $16 million fee for brokering the deal, and he tells no one. This is fraud, and a few other words come to mind too. And it'll come back to bite Bond fairly and squarely on the arse.

• 11:54Speaker 03

  But for now, Bondi's still flaunting his superhero cape for masterminding the Rothwell's rescue and for bringing the America's Cup race to Western Australia. Earlier in the year, before the share markets shut the bed, Fremantle had hosted the America's Cup. After Bondi's win in 1983, it was now time for Australia to defend the title. The government had spent $80 million giving Fremantle a facelift because, let's face it, Freeo is no Newport, Rhode Island. But there's a hiccup for Bondi. His yacht, Australia Three, is beaten in the trials. His dream of defending his title is shattered. It's another Australian

• 12:36Speaker 03

  yacht, Cookaburra, that will race against the Americans. But Bondi's still a winner, basking in the glory of hosting the biggest party Perth has ever seen.

• 12:49Speaker 04

  To the onlookers at Fremantle, it looked like a Hollywood film set. There was plenty of hype. The stars were there. Alan Bond got into the act, and Brian Burke lost his head in all the excitement.

• 13:01Speaker 03

  It's a period that West Australians still talk about, a party for the ages. There are yachting crews, spectators, luxury cruise liners, international media, and for months, the champagne flows. Legendary American newsreader Walter Cronkite, Kenny Rogers, Dolly Parton, Princess Anne, and Monaco's Prince Albert, they're all there. By now, Bondi's PR queen Lesley Green has switched sides. She's working for Australia's nemesis, American skipper Dennis Connor.

• 13:35Speaker 03

  When she finds out Dolly Parton's in town, she arranges for her to come and see the US yacht, because this time, it's the Americans who have a secret weapon, and it's called the Dolly.

• 13:47Speaker 00

  So Dennis Connor invited Dolly to visit the Stars and Stripes compound to see this mystery sail, this innovative spinica. She laughed out loud when she saw the puffy pockets attached across the upper chest of the spinica and designed to fill up with wind and puff out in front. Dolly was delighted the sail had been named after her.

• 14:11Speaker 03

  Nice of them to keep her abreast of their developments. Hosting the America's Cup is a huge win for the WA economy, but not so much for Aussie sailing. The Cookaburra crew is beaten by Dennis Connor, and Australia has to hand the cup back to the Yanks. Bondi? He's not so fussed. He's just happy to have brought the world to his beloved Freeo. I can't tell you exactly how many tourists have come to Fremantle. I can't tell you how much they've spent or how much the cup has brought. All the people are saying now is, of course, that Fremantle has at least been put on the map. To this day, many West Australians forgive Bondi his sins for exactly this: putting Perth and Fremantle on the map.

• 14:57Speaker 03

  But enough of the backslapping, because it doesn't last long. In November 1987, just three weeks after the stock market crash, Bondi does a Bondi. Right in the thick of the Rothwell's rescue, after watching many of his peers lose their fortunes, he makes an extraordinary decision.

• 15:18Speaker 05

  Businessman Alan Bond has taken time out from the rough and tumble of corporate takeovers to unveil the world's most expensive painting, Irises by Vincent van Gogh.

• 15:27Speaker 03

  It was expected to sell for at least $20 million, but this is Bondi we're talking about, so how much do you think this ended up Vincent van Gogh-ing for? $42 million, $43 million, $44 million, $45 million, $46 million, $47 million, $48 million, $49 million, $49 million. Bondi drops a cool $49 million US dollars on the painting.

• 15:56Speaker 00

  Irises changed hands at a Sotheby's auction in New York for a record-breaking price of $78 million Australian dollars.

• 16:03Speaker 03

  At that price, I'm surprised the West Australian government didn't buy it. Today, that $78 million would be the equivalent of $240 million. But for Bondi, it's worth every cent. He's always wanted a Van Gogh, and had just missed out on buying sunflowers earlier in the year. And now, he's done it. Alan Bond owns one of the most iconic paintings in the world.

• 16:29Speaker 00

  There's a level of ego involved in owning a very famous painting. He wanted it at all costs.

• 16:36Speaker 03

  Diana McGur is Bondi's art curator, and she says Bondi's not the only cashed-up businessman snatching up exie art.

• 16:45Speaker 00

  I think like most people with a lot of money and a real sense of their own, to be blunt, self-importance and ego, collecting art is not uncommon. He, I think, like the recognition he got for it, it was very much a sound investment for him.

• 17:03Speaker 03

  Even more remarkably, the auction house Sotheby's lent Bondi half of the money he used to pay for it. Is there anyone who won't lend this guy money? Sound investment or no, it's also a secret investment. Bondi buys Irises anonymously. I guess you can't have all those debtors wondering why you spent 78 mil on a painting when you can't pay your bills. He secretly hangs it in the boardroom of his family company, Dalhold Investments. And, uh-oh, I think Bondi might be in love again.

• 17:36Speaker 04

  Well, it's not just a painting. It's the most important painting in the world. Its beauty is beyond any comprehension or any words to describe it. And if you look at how alive it is, each flower actually stands out, and it lives, and you can almost smell it.

• 17:53Speaker 03

  Bondi doesn't want to keep Irises hidden forever. He's actually kind of desperate to show it off. He wants everyone to know it's his. So he asks his art curator, Diana McGur, to organise a national tour of Irises alongside some of his other iconic pieces: a Manet, a Toulouse L'trec, a Sizley, and a Gauguin.

• 18:19Speaker 00

  I think he wanted the exhibition to tour because it was part of his, if you like, ego trip to say, no, look, I'm a serious collector here. Hundreds, thousands of people, you know, tens of thousands, attended the exhibitions, obviously because of the infamy, if you like, of Alan Bond having purchased these works and purchased Irises in particular.

• 18:44Speaker 03

  But Bondi doesn't bank on this happening.

• 18:47Speaker 00

  The familiar slimy green waters of the Art Gallery Fountain had a bloody appearance this morning. At the water's edge, a message: Chile's blood, guerilla girls say boycott.

• 18:59Speaker 04

  We are protesting on behalf of all the artists, thousands of artists that have been killed, tortured, and suppressed in Chile. And we want to remind the public that there's still no freedom of artistic expression in Chile.

• 19:12Speaker 03

  Protesters disrupt the exhibition because Bondi's recently made a very controversial business deal. He's gotten into bed with someone he shouldn't have. No, not another mistress, a military dictator. Bondi has bought a majority stake in Chile's National Telephone Company. The problem is, the phone company is a tool of General Pinochet's brutal dictatorship.

• 19:38Speaker 04

  Alan Bond has bought himself a company that, through telephone tapping, has played a key role in keeping Pinochet in power. He's either naively or knowingly given his stamp of approval to a regime based on terror.

• 19:51Speaker 03

  This is a new low, even for Bondi, but the protests don't seem to faze him. After all, when Bondi went to Chile, the dictatorship told him they were doing nothing wrong.

• 20:03Speaker 04

  When I went there, I saw schoolchildren well dressed. I saw many government people saying, look, we are trying to present a better image to the world. The issues that have been raised are being looked at.

• 20:16Speaker 03

  Well, as long as the schoolchildren are well dressed, I guess everything's okay.

• 20:23Speaker 03

  In February 1988, a bombshell drops in West Australian politics. Premier Brian Burke resigns.

• 20:33Speaker 04

  Looking like a weight had been lifted from his shoulders. I will stand down as Premier on the 25th of February, the government's fifth anniversary. I make this decision believing Western Australia is being governed as well as it has since statehood.

• 20:50Speaker 03

  Burke had always pledged to only serve five years in office, and he's true to his word. But it's not quite that simple. Ever since the government helped bail out Rothwell's, the media's been hammering Burke over his relationship with entrepreneurs like Alan Bond and Laurie Connell. And if Burke thinks resigning will settle the matter, that it will stop the scrutiny, well, he's sadly mistaken. Especially because, as journalist Peter Kennedy says, despite being thrown a $300 million lifeline, Rothwell's is still sinking.

• 21:24Speaker 05

  Things weren't getting any better, and no matter how much money was poured into Rothwell's, it was going to go under.

• 21:32Speaker 03

  And in November, it does. Rothwell's goes belly up. All that rescue money is gone. Even after calling on his mates to save him, chairman Laurie Connell had kept plundering cash from Rothwell's, using it as his own private bank. That's why it's gone bust. And that bailout money? Connell used that for himself as well. Turns out, Connell's siphoned out hundreds of millions of dollars to pay his own debts. Good lord.

• 22:03Speaker 04

  West Australian taxpayers may lose $100 million. More than 1,000 small business and individual investors are wailing about their expected losses.

• 22:12Speaker 03

  The Rothwell's collapse is devastating for the small players. And for the big players, for the businessmen who threw money at the bank to save it, well, they've lost a shit ton too.

• 22:24Speaker 00

  Bond Corporation has funds on loan or deposit totaling between $12.5 and $18.5 million.

• 22:34Speaker 03

  Alan Bond is in a world of pain. He's spent the last two years flying closer and closer to the sun. He's buying and selling, making so many deals, it's almost impossible to keep up. And now, he's lost money on Rothwell's, and he's drowning in debt. He can barely pay the interest on his billion-dollar purchase of Channel 9. But still, he keeps on spending. He buys the US brewery, Heilman, for one and a half billion dollars, which is way over market value. Does this guy ever look at a price guide? But somehow, Bond's keeping his head above water, doing better than some of his rivals like Robert Holmes Accord.

• 23:16Speaker 03

  Holmes Accord is the giant behind Western Australia's Bell Group, a sprawling $5 billion empire. Like Bondi, he also owns mines, property, and media networks. He's also the man who beat Bond to the title of Australia's first billionaire, and that's got to have bruised Alan's ego.

• 23:36Speaker 04

  Bond and Holmes Accord really were locked in a bit of a duel for supremacy in Perth. Very different personalities.

• 23:46Speaker 03

  John McGlue is a Perth-based financial journalist, and the dickswinging of the 1980s corporate cowboys, well, let's just say it gives him plenty to write about.

• 23:56Speaker 04

  They each looked down the nose at each other, pissing on lampposts around Perth for years, trying to stamp out their territory.

• 24:03Speaker 03

  Well, that's one way to put it.

• 24:08Speaker 03

  Robert Holmes Accord is a completely different beast to Alan Bond. He's highly educated, sophisticated, more reserved. He keeps to himself. He certainly wouldn't be caught dead in a pair of stubbies. And the stock market crash has hit him hard. He's seriously cash poor and needs to sell the Bell Group. Bond is also suffering. Bond Corp has lost 25% of its value since the crash. He needs cash, and buying into Bell Group? That'll give him access to the company's cash reserves. Now, you may think it sounds counterintuitive to spend billions because you need cash, but that's because you're a scrupulous person with impeccable morals.

• 24:52Speaker 03

  Bond's thinking will all be revealed in due course, but for now, he sets up a meeting with Robert. Holmes Accord loathes Alan. He hates the idea of selling Bell to him, so he quite literally cries poor to get the best deal.

• 25:09Speaker 04

  Bond said, "He's a broken man. He cried in my presence." So Bond believed that he was taking advantage of Holmes Accord as the broken man, and he would be the undisputed heavyweight champion of Perth.

• 25:24Speaker 03

  Robert Holmes Accord is clever, a master negotiator, and John McGlue reckons he's pulling one over Alan Bond.

• 25:32Speaker 04

  I don't believe for a moment that Holmes Accord was a broken man. I think he was crying crocodile tears in front of Alan Bond, and he got what he wanted. He got cash in return for control of the two Bell companies, Bell Group and Bell Resources.

• 25:47Speaker 03

  Holmes Accord has played it well. He walks away with pockets full of cash. And Bondi?

• 25:53Speaker 04

  Bond was staring at a mountain of debt, and he was under a lot of pressure.

• 25:59Speaker 03

  Uh-oh, more debt. Exactly what Alan Bond doesn't need, because Bond Corporation is already up to its eyeballs in it. Bondi's corporate structure is labyrinthine, a complex web of offshore companies. He's constantly shuffling assets to keep companies afloat. And he just keeps on rolling the dice, taking gamble after gamble, buying companies like Bell with guaranteed cash flow to service his debts. It's a miracle Bondi can stay on top of it all. But after the market crash, everything is more vulnerable. Still, Bondi keeps on chasing the next big deal. He never did know when to stop.

• 26:46Speaker 03

  Enter Roland "Tiny" Roland. Not sure what's weirder, that his name was Roland Roland, or that people called him Tiny.

• 26:54Speaker 04

  Tiny Roland was a massive character.

• 26:58Speaker 03

  So he wasn't tiny?

• 26:59Speaker 04

  No, he was called Tiny. It was ironic. He was about six foot seven, I think.

• 27:04Speaker 03

  I'm sorry, I know you've already met a bunch of rich businessmen this episode, but stay with me, Tiny is about to play a Titanic role in Alan Bond's life.

• 27:14Speaker 04

  Very charismatic, powerful guy, long, sort of flowing, sandy-colored hair.

• 27:21Speaker 03

  And journalist Paul Barry says Tiny is trouble.

• 27:25Speaker 04

  He was hated. He'd done a few bad things. I think he was actually called the unpleasant and unacceptable face of capitalism.

• 27:33Speaker 03

  Tiny owns a $3 billion empire called Lonro, a London-based conglomerate that, as finance journalist John McGlue puts it...

• 27:41Speaker 04

  Did business with tinpot dictators.

• 27:44Speaker 03

  Doing business with dictators? The two of them ought to be best mates. The two sharks start circling each other with their toothy grins and summer tans.

• 27:54Speaker 04

  I think being called a shark is probably the nicest thing anyone's ever said about Tiny Roland. I've heard a lot worse. His business reputation was one where he would attack anybody who looked sideways at him, including his own board. His own board tried to get rid of him at one stage, and he decided, no, he was having none of that, and he got rid of them.

• 28:14Speaker 03

  It's summer on the French Riviera, 1988, and Bondi's moored his super yacht, the Southern Cross 3, at an exclusive marina in Entebbe. And it's here he crosses paths with Tiny Roland.

• 28:28Speaker 04

  Beautiful place, big flash harbour, lots of yachts, and a very flash yacht club. You can just imagine the conversation as the two of them are boasting about their exploits and how powerful they are and who they've done it.

• 28:40Speaker 03

  Bondi's not just having a dick-measuring contest with Tiny. That said, if you lose a dick-measuring contest to someone named Tiny, you're really in trouble. Bondi is gathering intel because Tiny Roland is telling him, one tycoon to another, all about his business woes with Lonro.

• 28:59Speaker 04

  Bond had discussed the possibility that he might be the white knight who would come and support Roland. Roland said, "That's all very nice, thank you, but no need for that." And Bond said, allegedly, "I won't buy any shares in Lonro then. Thanks very much."

• 29:16Speaker 03

  But Bondi smells blood, and he starts secretly plotting a hostile bid. And I think you can probably guess what happens next.

• 29:29Speaker 04

  Bond decided he would raid the company, having told Roland he would never do that. So Bond acquires 20% of Lonro initially, and then starts creeping, building a percent here, a percent there.

• 29:42Speaker 03

  It's shark-eat-shark on the French Riviera. And buying Lonro shares isn't Bond's only move. He starts angling for Tiny's superior mooring at the Entebbe Marina.

• 29:55Speaker 04

  Roland was right next to the clubhouse, and so he had the prime position. Bond sent somebody up to ask Roland's skipper when they would be moving out of the position so he could move Southern Cross 3 in.

• 30:09Speaker 03

  It doesn't go down well. Bondi hasn't done his homework. He has no idea who he's up against. And then, when word gets back to Tiny about Bond's share purchases, it's on like Donkey Kong.

• 30:25Speaker 04

  Roland turned on him viciously, like the beast that he is, and Bond should have known this because Roland's track record was so well documented. He was an absolute beast in Perth. Corporate fights. And Bond decided stupidly to poke the bear. Goodness knows why. Roland became incandescent with rage and he declared war on Bond.

• 30:50Speaker 03

  Bond should have known better because Tiny Roland does do his homework. And he finds out something that very few people know. That Bond's empire is as shaky as a castle built on sand. He owes billions and billions of dollars. Tiny wants to bring him down. He launches a full-scale attack on Alan Bond. And he doesn't do it alone. Tiny recruits an old rival of Bondi's to help. Robert Holmesa Court.

• 31:23Speaker 04

  Robert Holmesa Court supplied a couple of senior people to help with the financial analysis. People who knew the market here in Australia, knew Perth, knew the Bond empire, knew where the bodies were buried. So they had intimate knowledge of what Bond was up to.

• 31:39Speaker 03

  The result of this detective work is the Lonro Report. It's breathtakingly scathing and it lays bare the true state of Bond's finances.

• 31:50Speaker 04

  And that report charted an odyssey by Bond. Buying assets, paying too much for assets, buying silly assets and loading up on other people's money, loading up on debt to pay for it in what was even then a high interest rate environment. So the servicing cost of this debt for Bond was enormous. And that's exactly what Lonro attacked in this document. And the combination of all of that was so potent and powerful, bringing together this disparate information, hidden in plain sight until that point.

• 32:27Speaker 03

  The Lonro Report absolutely pincers Bondi. All Roland, Tiny Roland has to do now is spread the word.

• 32:37Speaker 04

  Think back to 1988, there was no internet, there was no email. And so luckily for Tiny Roland, Robert Holmesa Court fairly helpfully delivered many, many copies of the Lonro Report on Bond. He picked them up in his private Boeing 727 jet.

• 32:57Speaker 03

  Picks them up from London, mind you.

• 32:59Speaker 04

  And flew them back to Australia and distributed the reports.

• 33:03Speaker 03

  Ouch. The House of Bond is officially under attack. On the 18th of November, 1988, the 93-page Lonro Report lands in the laps of media and business bigwigs right across Australia.

• 33:19Speaker 04

  The brutal conclusion of the Lonro Report was that the book value of Alan Bond's assets were inflated. The debt on his balance sheet was too much and couldn't be supported. And ultimately that his companies were technically insolvent.

• 33:37Speaker 03

  In other words, there's literally no way Alan Bond can pay back the money he owes. The report makes headline news across the country.

• 33:47Speaker 04

  Lonro has ripped Bond's accounts apart, has pronounced them technically insolvent, judged them to be losing millions and accused Bond of being worth minus $4 billion. This was bombshell stuff for many of the people reading this report. Because they had always believed that Bond would trade himself out of any difficulties as he had time and time before. It changed completely the complexion of the relationship between Bond and its bankers. Because the bankers then started to, to scratch the surface and get their own valuations of the assets against which they had loaned some money.

• 34:27Speaker 03

  The banks tell Bond, we want our money back and we want it now. After years of smooth talking and palm greasing, it looks like a single report orchestrated by some guy Bondi pissed off in France could be the powder keg to set everything off.

• 34:48Speaker 04

  There's no doubt in my mind that the Lonro Report was the catalyst for the collapse of the Bond empire.

• 34:55Speaker 03

  Uh-oh, Spaghetti-O. In the next episode of Bondi from Hero to Zero, the House of Bond begins to crumble. Today, the final curtain on Bondi's empire. No more Rolls Royce travel, no more French champagne. For the moment, the bubble's well and truly burst. But Bondi's not going down without a fight. Bond had a habit of blaming everything bad on other people. And years of shady backdoor business deals are finally exposed.

• 35:29Speaker 04

  Bond was at the centre of one of the biggest political scandals in Australian history.

• 35:33Speaker 03

  Bondi from Hero to Zero is an ABC Rewind production for Radio National, produced on the lands of the Nalama, Gadigal and the Jutjik Warring people. I'm Mark Humphreys, catch you next time. You've been listening to an ABC Podcast. You can discover more ABC podcasts, live radio and exclusives on the ABC Listener.