Richard Pratt (Australian businessman)
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Richard J. Pratt (born Ryszard Przecicki, 1934) is a prominent Australian businessman, chairman of the privately owned cardboard company Visy Industries, president of the Carlton Football Club and a leading figure of Melbourne society. As of 2008, Pratt's personal fortune was valued at A$5.48 billion, and he was Australia's fourth richest man according to BRW magazine's Rich 200.[1] Pratt was a Companion and Officer in the Order of Australia, however he returned it in February 2008 after he was fined $36 million for price fixing.[2][3]
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[edit] Early life
Pratt was born in the Free City of Danzig of ethnic Polish Jewish parents on 12 March 1934.[4] His family emigrated in 1938 and settled in Shepparton, changing their surname from Przecicki to Pratt. Pratt was educated at Grahamvale Primary School, Shepparton High School and University High School and enrolled in a Bachelor of Commerce degree at the University of Melbourne in 1953.[5] He also played Australian rules football for Carlton in the Victorian Football League's under-19s competition and was awarded the Morrish Medal in 1953 for being deemed the "best and fairest" player that year. Pratt never continued his footballing career to senior VFL level, however, instead focusing on other interests.
Pratt combined study with acting and working as salesman for the family business, Visy Board. After touring London and New York with a production of Ray Lawler's Summer of the Seventeenth Doll, he returned to Melbourne and Visy. Following the death of his father Leon in 1969 Pratt took over his father's business, which at that time had several hundred employees and an annual turnover of $ 5 million AUD.[6]
[edit] Business career
Under Pratt’s direction, Visy expanded from two factories in Melbourne to more than 55 plants across Australia, U.S., New Zealand, and Papua New Guinea. From cardboard boxes and packaging, Visy moved into waste paper recycling. Later in the 1990 Pratt expanded his operations considerably into the New York waste paper business.
In 1993 the National Crime Authority (NCA) raided Pratt's offices in connection with an investigation into businessman John Elliott's foreign exchange dealings and his spoiling domestic stake in BHP while his Elders IXL was insolvent.[7] The following year, however, the NCA paid costs and returned documents seized.
Also in the 1990s Visy was ordered by the ACCC to pay a half million dollar fine for illegal anti-competitive behaviour.[8]
On 16 May 2007, he was awarded the Woodrow Wilson Medal for Corporate Citizenship.[9] This is given to is executives who,
...by their examples and their business practices, have shown a deep concern for the common good beyond the bottom line. They are at the forefront of the idea that private firms should be good citizens in their own neighborhoods and in the world at large[9]
[edit] Public career
As well as his business interests, Pratt is known for his involvement in public service, having held posts including: foundation chancellor of Swinburne University of Technology, president of the Victorian Arts Centre Trust, and Chairman of the Board of Management of the Mental Health Research Institute of Victoria.
Through the Pratt Foundation, the Pratt family are among Australia's leading philanthropists donating up to $10 million AUD a year. Pratt was named Environmental Visionary of the Year in 1998 by the Keep Australia Beautiful Campaign. Pratt received the AO, Officer of the Order of Australia, in 1985 and the AC, Companion of the Order of Australia in 1998, Australia's highest honour. His wife, Jeanne, is also an AC recipient.
On 8 February 2007, he was appointed president of the Carlton Football Club.
Pratt has also donated considerable funds to both major political parties (for example $300,000 AUD in Financial Year 2003-4),[10] and also including former Australian Prime Minister John Howard's Liberal government.[11] In 1996 an investigation by The Australian newspaper documented from internal company documents that Pratt maintained a multi-million-dollar network of advisors.[7] This included $8333.33 a month fee to Bob Hawke for consultation on "Asian and government matters", $27,220.03 for travel to the US for Gough Whitlam as business adviser on overseas markets and other sums for former state premiers Nick Greiner and Rupert Hamer.[7]
[edit] Personal life
He has been married to Jeanne Pratt for 47 years. They currently live together in Raheen, in the Melbourne suburb of Kew.[7] Together they have three grown children: Anthony, Heloise and Fiona.
Another daughter, Paula, was born in 1997 to his long-term mistress, Sydney socialite Shari-Lea Hitchcock.[12] In 2000 this affair became the subject of widespread media attention due to a court case involving Ms Hitchcock and a nanny hired to look after her daughter. At the time, Mr Pratt was accused of trying to pay hush money to the nanny who had launched legal action against Ms Hitchcock.[13]
[edit] Conviction for Price Fixing
In December 2005 the ACCC commenced prosecution against Pratt for involvement in a cartel in the packaging industry.[7]
On the 10th of October 2007, Richard Pratt was formally accused of price fixing, cheating customers and companies out of approximately $700 million Australian dollars in the nation's biggest ever cartel case.[14] The ACCC alleged "very serious contraventions" of the law and that these had been "carefully and deliberately concealed" by Pratt.[15] The ACCC counsel further stated:
"There can be no suggestion that Visy acted in ignorance of its obligations under the act,"[16]
and further added that the deliberate use of pre-paid mobile phones that could not be traced and the holding of meetings in private homes, motel rooms and suburban parks
"...provides a strong indication that Visy was fully aware that the conduct was illegal".[16]
After more than a year of denials Pratt subsequently admitted his guilt, acknowledging he and his company VISY, and "rival" company Amcor deliberately broke the law.[17] Pratt was aggrieved by the criminal prosecution and its effect on his reputation, stating:
"I feel very angry -- Visy is seen as Richard Pratt's company -- there is a certain amount of character assassination for me personally because I am a tall poppy in the community; it's a big scalp (for the ACCC). My reputation is something I have been building for 50 years and so I am worried that the general public will now see me as a rich person who has made his money doing something that is wrong in the eyes of the law."[17]
On November 2, 2007, Pratt and the Visy group received a A$36 million fine, representing both the largest fine in Australian history and an estimated 0.75% of the Pratt fortune.[18] [19] [8] Federal Court judge Justice Heerey said Mr Pratt and his senior executives were knowingly concerned in the cartel, which involved price fixing and market sharing.[18]
"This is the worst cartel to come before the courts in 30-plus years, Justice Heerey said.
Customers of Visy have initiated claims against Visy and Amcor, including a $120 million suit by Cadbury Schweppes against Amcor.[8]
| Preceded by Graham Smorgon |
Carlton Football Club president 2007- |
Succeeded by Incumbent |
[edit] References
- ^ BRW Rich List 2008 article
- ^ Commonwealth of Australia Gazette, Special S 40, 22 February 2008
- ^ Ninemsn.com: Vizard hands back Order of Australia
- ^ Only Melbourne profile: Richard J Pratt
- ^ Richard Pratt. University Secretary's Office, University of Melbourne (2004). Retrieved on 2007-03-17.
- ^ Visy History
- ^ a b c d e News.com.au: Boxed-in billionaire
- ^ a b c The Age: Who really foots the bill for Pratt's philanthropy?
- ^ a b Woodrow Wilson Awards
- ^ AEC: Pratt Holdings Pty Ltd 2003/4
- ^ The Age: Howard to keep Pratt's donations
- ^ Sydney Morning Herald: Space invaders
- ^ News.com.au: Couple speak out on mistress
- ^ Herald Sun: Richard Pratt cardboard deal may have cost $700m
- ^ The Australian: Pratt buttoned up and beaten
- ^ a b The Australian: Watchdog puts $36m bite on Pratt
- ^ a b The Australian: Richard Pratt to admit breaking law
- ^ a b Pratt, Visy fined $36m
- ^ Ninemsn.com: Carton king Pratt to front cartel case
