Melbourne banker plans to sell Port of Darwin, twice 

David Potaznik sold the Port of Darwin last year on behalf of the Northern Territory government for half a billion.Now, in an act of investment banking chutzpah, he is going to sell a chunk of it again – on behalf of the Chinese energy and infrastructure group he sold it to in the first place.

Mr Potaznik has been hired by Landbridge Industry Australia to sell a 20 per cent stake in the port under the terms of the sale agreement he negotiated last year when he helped the Territory government choose the buyer.

A career investment banker from Melbourne, Mr Potaznik was a managing partner at a boutique firm, Flagstaff Partners, when it won the mandate to find a buyer for a 99-year lease of the port. The deal famously upset the US government because of concerns the Chinese owner would spy on American Navy ships.
The Territory government announced last October that Landbridge would pay $506 million for the 99-year lease of the port of Darwin. Landbridge is required to sell 20 per cent of the asset to Australian investors. Glenn Campbell

In business, joining a company after awarding them a contract is often frowned upon. Mr Potaznik, who has been working out of Landbridge’s Brisbane offices, said he didn’t speak to the Chinese company about working for it while he was negotiating the sale on behalf of the Northern Territory.
“Prior to the Port of Darwin lease transaction I had no knowledge of Landbridge or any of its executives,” he said in an email. “No discussions with Landbridge in relation to a potential consultancy arrangement were held until well after the lease transaction was completed.”

Mr Potaznik stopped working for Flagstaff Partners in April after five years and four months, according to his LinkedIn profile, which says he has a “new role” without identifying that he has been hired by Landbridge, a privately held Chinese company that has a real estate arm that builds hotels.

Flagstaff Partners, which is selling the Port of Melbourne for the Victorian government, has in recent months appeared to have told journalists that Mr Potaznik was on a permanent “sabbatical” without mentioning his new job.

The Northern Territory government hasn’t disclosed how much it paid Flagstaff to sell the port. A spokeswoman for the Northern Territory government declined to comment on Mr Potaznik’s switch. Anthony Burgess, Flagstaff Partners’ chief executive officer, didn’t return a call. On Thursday, a Flagstaff spokesman said the firm hadn’t had any contact with Mr Potaznik since he left in April.

The Territory government announced last October that Landbridge would pay $506 million for the 99-year lease of the Port of Darwin. Under the agreement Landbridge is required to sell 20 per cent of the asset to Australian investors, which it has hired Mr Potaznik to do.

There were three other interested bidders for the lease, according to media reports: specialist infrastructure manager Palisade Investment Partners; RREEF Infrastructure, which is now Deutsche Asset and Wealth Management; and Whitehelm Capital. All declined to comment.

The top official for vetting foreign investment was so concerned the port would be leased to the Chinese-owned Landbridge he asked three times for the Department of Defence and intelligence agencies to consider the national security implications. 

The Foreign Investment Review Board chairman, Brian Wilson, said he became aware of the deal in late 2014 and asked for a response from Defence and intelligence agencies in early 2015 and again in March. 

After a second response from Defence expressing no reservations to the deal, Mr Wilson asked for it to be considered a third time “at the highest possible level”.

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One Comment Add yours

  1. Suzanne O'Connell says:

    I would like to know how the Government can sell our assets without having the approval of the taxpayers? If I went away and had my neighbor looking out for my home, and that said neighbor sold my home while I was away, that would be classed as theft wouldn’t it? So how can the Government do it. This to me is a class act of treason against the people of Australia. It needs to be stopped immediately before we end up paying rent to foreign countries to live here in Australia.


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