Rich Australian Artist Sues Advisors for Squandering Fortune

Lachlan Colquhoun

26 March 2008

One of Australia’s richest and most successful artists, Ken Done, is suing the financial advisory arm of the country’s biggest lender, the Commonwealth Bank, for squandering three-quarters of his personal A$61.5 million fortune. Mr Done is claiming A$53 million from the CBA for poor management of his financial affairs between 2001 and 2005, alleging that his fortune was whittled away on risky loans and stakes in obscure companies, many of which ultimately failed. A Sydney court heard its first preliminary hearing into the matter this week, but in documents filed with the Federal Court Mr Done said he believed his money was in the safe hands of experienced managers investing in blue-chip shares during a share-market boom. He says he specified that only 20 per cent of his money was to be invested in higher risk ventures. Instead, however, the artist claims he discovered that the bulk of his money was sunk into non-performing investments such as a stake in two local soccer teams, a beauty spa, a catering company and an obscure Maltese bio-technology company. Many of these investments were now virtually worthless and Mr Done claims unauthorised loans to individuals have not been repaid or cannot be covered. For this service, Mr Done says he was charged almost A$2 million in fees over the six year period, during which time he was misled by false accounting entries in monthly performance statements. He argues he did not “actively supervise” his investments because he trusted the advisors were protecting his investments. The first sign that something had gone wrong was in April 2005 when Mr Done says he received a call from the chairman of the Newcastle Stock Exchange, who was also a director of one of the companies his money had been invested in. Mr Done, 67, became wealthy in the 1980s through licensing his artwork for use on merchandise, such as clothing and homewares, which were particularly popular with overseas tourists.