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Newcastle Knights in a $20 million dilemma with Nathan Tinkler's ownership of club under threat
- By James Hooper
- The Sunday Telegraph
- December 09, 2012 10:17AM
In jeopardy ... Tinkler's money troubles could cause issues for Wayne Bennett's contract. Source: Liam Driver / News Limited
Troubled billionaire Nathan Tinkler's ownership of the Newcastle NRL team is under threat due to a standoff with the Knights Members Club board over the terms of his $20 million bank guarantee.
In the same week that Tinkler had his $15 million private jet and a helicopter re-possessed, News Limited has learned Hunter Sports Group has asked for an independent audit of the Knights, which was due to be completed by next Saturday, to be pushed back to February 15.
But the Knights Members Club board have refused to comply unless Tinkler extends his $20 million bank guarantee - due to drop to $10.3 million on January 1 - across the same time frame.
"There's a lot of concern in Newcastle and the Hunter community. The Knights Members Club board are being asked to stay vigilant and alert," Knights Members Club board chairman Nicholas Dan said.
"We want to make sure the bank guarantee stays at its highest until they've finished the independent audit obligations, but HSG have a difference of opinion there.
"By moving the audit date but not moving the bank guarantee date means Knights members can no longer put pressure on HSG for any funds to be committed if there's a shortfall.
"We're communicating with them just about daily and we're pleased that the auditing process is commencing."
The latest development comes as Tinkler's empire continues to crumble, with horse racing arm Patinack Farm and another company, Mulsanne Resources, placed into liquidation.
And last Thursday, the NSW Government launched legal action against HSG over $600,000 in unpaid rent for Hunter Stadium.
Under the terms of Tinkler's 10-year $100 million privatisation deal, HSG guaranteed the Knights Members Club would be supplied with an independent audit on December 15 each year.
Failure to do so is a breach of the contract, but Newcastle chief executive Matt Gidley denied Tinkler's tenure as owner was under fire.
"Obviously (Tinkler's) had a number of issues in his own business world through the course of this year, but it sort of gets washed over the amount of investment he's poured into our club," Gidley said.
"To have someone like Wayne Bennett ... without Nathan Tinkler there's no Wayne Bennett at Newcastle.
"Having our membership where it is, we were third in crowd attendance this year even though we finished 12th.
"The club is well positioned to really push into 2013 and be a genuine contender.
"It's important we acknowledge that and enter 2013 focused on the footy and support our team as best we can. We look forward to meeting with the Members Club as soon as possible to find a resolution in order to continue to put the focus back on the club."
News Limited can reveal accounting firm Crosby Warren Sinclair will begin the audit this week, where HSG must make up any shortfall on the promised $10 million in sponsorship and $2.5 million in junior development.
Failure to inject the cash could result in the Members Club calling on the $20 million bank guarantee to be placed into a joint account.
If Tinkler's deal with the Knights were to collapse, the contract of Bennett and all other staff employed by HSG would be placed in jeopardy.
