Unlike most other NBR Rich Listers, Eric Watson’s wealth appears to be shrinking.
By just how much is hard to quantify but a high-profile bust-up and subsequent legal battle with Sir Owen Glenn seems to have been the catalyst.
At the time of compiling this year’s list, Watson indicated he would appeal a judgment that ruled he’s engaged in “deliberate deception” when setting up a joint venture with Sir Owen Glenn.
The legal battle centred on a property venture called Spartan Capital, in which Sir Owen ploughed nearly $250 million, while Watson claimed an equal shareholding.
Since the trial Watson has been selling his New Zealand assets and reorganising his offshore investments. NBR understands some of the proceeds have been reallocated into other private investments but a Watson spokeswoman wasn’t able to provide any fresh details.
Divestments include his luxury Te Hihi estate in Karaka, sold for $14m last year, a stake in Auckland restaurant Soul Bar and Bistro, for an undisclosed sum, and a half share in the New Zealand Warriors Rugby League team.
Meanwhile, his main public asset, lingerie company Bendon Group, has merged with Nasdaq-listed Naked Brand Group which is now about 70% owned by Watson’s Cullen Investments.
Going into the merger both companies were loss-making, according to filings with the US Securities & Investments Commission.
Naked reported a loss of $US5.8 million on revenue of $US2.9m in 2017. The underwear company, which sells mainly through Bloomingdales, Nordstrom.co m and Dillards, said in its annual report filed in May it expected to make further losses this year.
Bendon, whose brands include Heidi Klum Intimates and Swimwear, Stella McCartney Lingerie and Swimwear, Bendon and Bendon Man, reported a loss of $NZ37.4m for the year to January 31 on revenue of $131.4m.
Total borrowings at balance date stood at $51.2m and the company noted it was in breach of its gearing ratio covenant in September and December.
The new merged entity is listed on the Nasdaq and late last month the shares were trading at about $US4.50, valuing the company at $US105m.
Watson’s Cullen Investments holds roughly 70% of the shares following the merger.
Meanwhile, Watson retains a 14.5% stake in Long Blockchain Corp. This company gained notoriety when it changed its name from Long Island Iced Tea to take advantage of the cryptocurrency craze. It’s share price quadrupled before plunging again and eventually it was delisted from the Nasdaq for failing to keep its market cap above $US35m, amid concerns the company made statements designed to mislead investors.
The former beverage company remains quoted on the less-regulated OTC Market but even that exchange has issued a warning to investors saying the company may not be making material information publicly available.
Earlier this month the US Securities and Exchange Commission subpoenaed the company for documents.
Long Island Iced Tea was originally listed through the backdoor of Watson’s Cullen Agricultural Holding Corp, which had earlier merged with a blank-cheque company started by Watson and business partner Jonathan Ledecky.
Cullen’s website says it operates The Watson Foundation, a charitable trust focused on enriching the lives of underprivileged children and young people.
However, according to the Charities Register, the foundation has given just under $100,000 in the past decade.
Watson’s private property holdings are now mostly located in the UK, Europe and the US.