Twiggy (5 page)

The official line is that Forrest became a model student under this sort of guidance at Hale School. He did become a school prefect and a boarding
house captain in his final year and made the rugby and swimming teams. “Hale School represented a turning point in my life,” Forrest wrote in a message published in a 2012 newsletter for the Hale School Foundation. “To attend a school which believed in me and my potential allowed me to achieve well above what I ever had in many areas. On reflection, the support and drive that was instilled in me
can be traced back to the staff, many of whom saw more in me than I did myself.”

The truth about Forrest’s turnaround, as with many events in his colourful life, seems to be a bit less clear-cut. Former students recall that Forrest never lost his larrikin streak at Hale and was often the leader of the pack whenever the boys were getting up to mischief. But many also recognised at the time
that their mate was likely destined for bigger things. “You knew if you were going out somewhere with Andrew you’d have some fun and that he’d end up pushing the envelope a bit,” says one former student who is still close to Forrest. “He was great fun and larger than life. Even then, it was obvious that his success would come from a combination of personality, hard work, the gift of the gab and his
contacts.”

Forrest also brought to Hale his love of a good scrap. Some recall him instigating a brawl with students from Churchlands Senior High School, the local government-run school, outside a nearby shopping centre. A tale still circulating among Forrest’s old classmates is that he would always carry a mouthguard in his back pocket just in case the opportunity arose for a fight.

During his two years at Hale, Forrest claims to have suddenly lost his stutter, which had always grown noticeably worse whenever he was under pressure or before an audience. The teenager’s parents had earlier sent him to a hypnotist, who had promised to cure the stutter with just three expensive lessons. “After about the ninth or tenth lesson, we realised he was a snake oil salesman and we stopped,”
he recalled. According to Forrest, he suddenly “lost” the stutter by volunteering for the debating team. It was a valuable lesson to the youthful Twiggy that risk could bring great rewards: “It was a real blood sport at school, a gladiatorial environment – all jeering and hissing and booing. I was the first speaker – the weak link – and the auditorium was packed because they all knew I had a stutter.
I just cracked it. I managed to speak slowly and softly. I knew I could do it and I have never looked back. That taught me the power of real determination.”

There is no complete cure for stammering, and it’s well documented that many successful people – from King George VI to Hollywood actors and politicians – have learned to control the disorder to the point where it is almost undetectable.
Forrest has never spoken in depth about the psychological impact of the stutter on him as both a child and an adult. He suffered from it for many years after leaving Hale and even into his late twenties and early thirties. “His stutter was still quite pronounced, even in Year 11 and 12,” confirms an old friend. “He was very conscious of it and worked on it. Being on the debating team did help
him and it gave him confidence. But it certainly hadn’t gone by the time he finished school.”

Forrest’s confidence was also rising rapidly when it came to chatting up girls. “He was very persistent in asking girls out,” recalls the old friend. “He could pull girls like no one I knew because he just didn’t give up – and he did have a charm.”

His academic performance appears to have
lifted at Hale, to the point where Forrest had the marks from his final exams to enrol in a commerce degree at the University of Western Australia, the state’s most prestigious tertiary institution. The marks needed to enrol in commerce were quite high, but still well below those required for courses such as law and engineering. Tregonning believes the fact that Forrest repeated Year 11 at Hale in
1978 helped him compete academically with boys who were a year younger than him and also gave him a chance to mature. But students from that period say it would be wrong to suggest that Forrest was one of the brighter pupils in the class of 1979. “He was reasonably good academically,” says a classmate. “But I don’t think he was an outstanding student academically. He did well enough to get into university
but he certainly wouldn’t have been in the top ten guys in our school.”

Forrest’s close mate at Hale, Adam Rankine-Wilson, was another who never excelled academically. Rankine-Wilson, who died of cancer, aged forty-nine, in 2011, started his career as an insurance salesman with AMP but went on make a fortune in investment banking and was not afraid to show off his money-making ability by
acquiring flashy toys. Both Forrest and Rankine-Wilson had qualities that can’t always be taught in school: street smarts and self-belief in spades. Forrest may have been reflecting on himself and Rankine-Wilson in 2010 when he said: “The world is full of intellectuals that failed and ordinary people that you would never have rated at school, that are successful. The difference between them is
determination.” For their thirty-year Hale anniversary reunion in 2009, Forrest and Rankine-Wilson, the billionaire miner and the deal-making whiz, got the chance to show off their financial success by taking their old schoolmates – many of whom were still paying off mortgages and living ordinary lives – to Rottnest Island on their huge launches.

One of Forrest’s teachers at Hale, Bill Edgar,
remembers well the teenaged “Twig” and says he is never particularly surprised when boarders from yesteryear make good. Edgar, who is these days the official archivist at Hale, believes boarding schools breed character and toughness in young men, and that this may well be the secret to much of Forrest’s resilience in later life.

After school, Forrest sated his fledgling appetite for adventure
by flying to Africa with his Hale classmate John Morrison, who these days is a top investment banker at Grant Samuel in Melbourne and remains one of Twiggy’s closest friends. The pair headed straight for the Ugandan capital, Kampala, where Forrest bluffed his way into a meeting with the country’s tourism minister on the basis that he was there exploring investment opportunities. The youthful
Forrest, showing all the talents that would later land him with the nickname “Silver Tongue” in Perth stockbroking circles, managed to persuade the Ugandan minister to give him a special certificate which guaranteed the two Australian visitors unimpeded access to the country’s best tourist sights.

But while Forrest and Morrison were snorkelling on a pristine coral reef about twenty kilometres
offshore, a huge wave sank the small fishing boat they had been travelling in. Twiggy reportedly helped those on the boat, including a mother and her baby, to scamper onto a rock, where they all stayed for two days without food or drinking water. Finally, the bedraggled group, by this time close to dehydration, was rescued by a passing boat. The African adventure story has been told to a few
journalists over the years, although we may never know the precise events that took place or the extent of the duo’s bravery. Regardless of the facts, it wasn’t to be the last time that Twiggy’s smooth talking and penchant for risk would lead to unexpected problems.

Back in Perth, Forrest started his commerce degree but soon switched to UWA’s arts faculty, completing a double major in economics
and international politics. He then returned to Minderoo in 1982 to ponder his career options. By now, his parents’ marriage had ended and life on Minderoo, where droughts, floods and cyclones were frequent events, was becoming even tougher for Don Forrest, who was in his mid fifties. (Don later remarried and stayed another sixteen years at Minderoo, before selling the station in 1998 to pay
his mounting debts and moving to Perth.)

If Andrew had any lingering thoughts about whether he might remain on the land and take over the family business, his father quickly dispelled them. “I’d kind of been given the impression by Dad that Minderoo would most likely go on a hands-on basis to my older brother David and that was fine by me,” Forrest said. “And if I had a role it would be
of a more investor/accountant/financial advisory role. So reading the tea leaves it was like, ‘You’d better go and make your own way, son,’ and I think that was probably a very good thing.”

According to Don Forrest, it was Andrew who showed the least interest of the three children in staying at Minderoo. “He was never really interested in cattle and sheep; he was much more interested in the
business side of things,” he said.

Forrest spent several months working for his father at Minderoo before heading back to Perth in search of a job. It was 1983, Perth was gearing up for yet another economic boom and Forrest was about to discover his first true calling in life: making money.

He’s got a hide on him. You could shoot him in the arse and he wouldn’t know.

—JEFF BRAYSICH, Forrest’s former stockbroking colleague

John Poynton looked across his desk at the stammering country bumpkin sitting opposite him and tried to suppress a chuckle. Poynton was a star stockbroker and partner at Hartley Poynton, the blue-blooded
firm his father had established in Perth during the 1950s. The unemployed Andrew Forrest, who was “dressed like a stockman” and armed with only an economics degree and a healthy dose of chutzpah, had managed to sweet-talk his way into Poynton’s office.

But when it came to speaking face-to-face, Forrest’s chronic stutter meant he could barely get his words out. “It was hard to be serious
because I didn’t know how he would ever be able to sell anything to anybody – clients were going to hang up before he’d got the pitch out,” Poynton recalls of the 1983 job interview. “I’m assuming that, like a lot of stutterers, the more nervous he was the worse it became. But this was so bad it was almost like a caricature of a stutterer.” Poynton sent Forrest on his way. Thirty years after that
meeting, he sees irony in the fact that Forrest – who is now a friend – would ultimately make billions of dollars through his gift of the gab. “I’m the idiot for not employing him,” he laughs.

Dressed in RM Williams boots, moleskin chinos and a blue chambray shirt, the tousle-haired Forrest did not exactly fit the image of the employee favoured by Perth’s clutch of establishment broking firms.
They preferred to hire young men in dark suits raised in the city’s genteel western suburbs. Day after day, Forrest trudged along St Georges Terrace looking for a break. He cold-called and sent letters to most of Perth’s broking firms and banks, but he continued to be rejected.

Eventually, he promised Bruce Benney, the head of broking house Benney Partners, that he’d work for no pay for
if he was just allowed in the door. The offer was too good to refuse for Benney, who took on Forrest as a research analyst. “He was a terribly, terribly enthusiastic young man,” Benney recalled. “It was through sheer persistence that he got his foot in the door. And once he did, we couldn’t close it.” After three months, Forrest was put on the books as an employee and back-paid. The real adventure
had begun.

Forrest’s arrival in the stockbroking industry in 1983 proved to be fortuitous. It was the beginning of a gilded four years of wealth accumulation and corporate deal-making in Australia that would end abruptly with the October 1987 stockmarket crash. By then, plenty of fortunes and reputations would have been made and lost. And Perth would produce more than its fair share of high
flyers, several of whom would end up in jail.

The global economy in 1983 was just recovering from the effects of a sharp recession in the United States, while in Australia the newly elected Hawke government was preparing to launch a string of business-friendly reforms that would open up the economy to the rest of the world. These included floating the dollar, deregulating the financial system
and slashing tariffs. In Perth, with its history of money fever dating from the nineteenth-century gold rush, the boom of the 1980s would be bigger than anywhere else in the country. So much bigger, in fact, that Western Australia would officially declare itself the “State of Excitement”; the slogan was stamped on every new vehicle’s licence plate.

Yet it was a yachting race off the coast
of Rhode Island in 1983 that had an even bigger impact on the Western Australian psyche. In September of that year, just as Forrest was settling into his new job at Benneys, a highly exuberant Perth entrepreneur called Alan Bond spearheaded Australia’s bid to wrest the America’s Cup from the venerable New York Yacht Club. Bond was already a major figure in Australian business but his bankrolling
of this national sporting conquest transformed him into a popular hero and propelled him towards bigger and riskier deals that would lead him into bankruptcy, and ultimately prison for committing Australia’s biggest corporate fraud. Bob Hawke, the former Perth beer-drinking champion turned prime minister and a big fan of Bond, summed up the ebullience of the America’s Cup triumph with the immortal
words: “Any boss who sacks anyone for not turning up today is a bum!”

When the Auld Mug arrived in Perth after 126 years at the New York Yacht Club, an estimated 200,000 people – one-fifth of the city’s population at the time – turned out to catch a glimpse of a beaming Alan Bond in an open-top Rolls-Royce leading the ticker-tape parade. Spurred by his victory, “Bondy” went on to acquire
all the trappings of wealth – a private jet, fast boats, grand properties, prized artworks and blonde mistresses – while doing multibillion-dollar business deals at a dizzying pace, all funded entirely with other people’s money. At the peak of his hubris, he even starred in a popular television advertisement for his own Swan Brewery featuring a catchy jingle with the chorus, “They said you’d never
make it, but you finally came through.” Bond had started to believe his own legend.

One of Bond’s closest mates was Laurie Connell, a pugnacious Perth business identity whose twin passions in life were doing deals and betting colossal amounts on horseracing. Known along St Georges Terrace as “Last Resort Laurie”, Connell could always be relied upon for a loan. As one Perth businessman said
later: “People liked going to Laurie for money. They could go in at 9am and have their money by 9.15 with very little paperwork. The interest charges didn’t matter in a bull market because they were making so much on the stockmarket with the money they got.”

What nobody knew, however, was that between 1983 and 1987 Connell was siphoning off more than $130 million of depositors’ funds from
his firm, Rothwells, into his private interests. This had been hidden in Rothwells’ glossy annual reports through a massive fabrication of the accounts. In the official report into the inevitable collapse of Rothwells, Malcolm McCusker QC, who is now the governor of Western Australia, found that the bank was effectively broke from 1985. “Depositors [of Rothwells] would surely have been alarmed
had they known that they were, in reality, lending largely to Connell, on an unsecured basis, to finance personal acquisitions such as racehorse stables and art; and even more alarmed had they been informed that Rothwells, the company to which they believed they were lending, was effectively insolvent.”

The freewheeling business culture of Perth in the 1980s was influential in shaping the
young Andrew Forrest. By the middle of the decade, Bond and Connell were in full flight, the sharemarket was booming and Forrest was beginning to thrive. He left Benneys in 1985, aged twenty-three, for a job as a dealer with a new stockbroking house called Kirke Securities, which had a strong focus on the resources sector and boasted some big institutional clients on the east coast.

By this
time, with his confidence soaring, Forrest was also able to bring his stammer under greater control as he worked the phones in search of new business. Just two years after being unable to speak in the presence of John Poynton, Forrest had earned the nickname “Silver Tongue” in Perth stockbroking circles for his powers of persuasion. “He was phenomenal at making phone calls,” recalls Graeme Kirke,
the principal of the firm. “He was always on two phones on the desk at a time – I’d never seen that before.”

Forrest’s time at Kirke Securities was brief but formative. Above all else, he learned the importance of establishing contacts with the biggest names in business. And the biggest name at the time in Australia was Alan Bond, who had become a client of Kirke Securities through a connection
established by Forrest’s colleague Brett Fogarty. (Fogarty himself would go on to make hundreds of millions of dollars in the mining boom of the 2000s through his engineering company GRD.) Forrest also wrote plenty of business for some of his wealthy connections in the pastoral industry. But the boy from the bush did take a while to adjust to life in the corporate world. Recalls Graeme Kirke:
“We had to buy him a suit; we said to him, ‘You can’t keep wearing the chinos and the RM Williams.’ He would come into work and there would be red dust stained from the seatbelt across his white shirt. Those sorts of things weren’t an issue for him.”

Although Forrest was unconventional, his peculiar brand of naïve enthusiasm won him admirers. One day the staff at Kirke Securities were working
away in their first-floor office in central Perth when they were startled by a horrifying screech of brakes on the street below as a car slammed into a motorbike. Graeme Kirke remembers Forrest as the only employee who immediately ran downstairs to help. It was an impulsive act that, Kirke believes, underscores Forrest’s strong sense of morality. “We all went to the window to have a look, but
Andrew was the person who went straight down and got the guy off the bike. It was quite ugly and Andrew looked after him until the ambulance arrived. He does those things not because he wants anything from it; he does it because it’s what you should do.”

Fifteen years later, when he had become one of Australia’s richest men, Forrest would perform a similarly impulsive act when he witnessed
a vicious brawl between two men in the Perth CBD. According to media reports, the “incredibly brave” Forrest jumped in between the two men – both of whom were much bigger than him – and managed to break up the fight, but not before being walloped in the chest for his troubles. A television station showed mobile-phone footage of Forrest, dressed in a suit and tie, leading one of the men away from
the brawl and calming him down, with the report labelling him a “good Samaritan” and a “humble billionaire”.

In 1983, another significant event took place in Perth that would shake up the old regime: a youthful former television reporter called Brian Burke came to power as premier of Western Australia. Burke promised a fresh, entrepreneurial style of Labor government and immediately set about
forming close alliances with the local businessmen who had long supported – and donated to – the Liberal Party.

Burke’s intentions, at least initially, were pure: he wanted to boost the economy while rewarding Perth’s business community – all for the greater good of the state’s taxpayers. But his execution was deeply flawed. In what would become known as “WA Inc.” Burke handed out contracts
to his chosen tycoons in a series of dodgy deals that cost the state hundreds of millions of dollars. He would end up going to prison before re-emerging in the 2000s as a brilliant lobbyist for Perth’s new breed of business leaders, including Andrew Forrest.

In the 1980s, Brian Burke saw something he especially liked in Alan Bond, a former sign-writer, and Laurie Connell, the son of a bus
driver. Bond and Connell were certainly not the typical old-school-tie Perth businessmen who’d run the city for decades and they quickly sided with Burke. But the premier soon came to realise that Connell, who had been involved in a string of horseracing scandals and would end up going to prison, was hardly squeaky-clean. “I’d hate to stand between Laurie and a bag of money,” he said.

Connell
dazzled Perth with his conspicuous consumption. He owned 400 horses in Australia and England, hosted a grand reception for Princess Anne at his country estate and bulldozed six waterfront houses in Dalkeith, an exclusive riverfront suburb, to make way for a multimillion-dollar mansion on a new 10,000-square-metre “superblock” – a scheme that had to be abandoned when the good times ended in October
1987. It would be another two decades before Perth would again revel in the euphoria of a boom of such magnitude – and by that time Andrew Forrest would be richer than anyone who came before him. But in champagne-soaked Perth in the mid 1980s, few dared to ask whether Alan Bond and Laurie Connell might be crooks.

Forrest certainly wasn’t about to question the business ethics of Bond or Connell.
The tycoons would become two of his own treasured clients after he left Kirke Securities in 1986 to launch the Perth office of Sydney broking house Jacksons. Forrest was hired by Jacksons’ managing director, Bob Pfafflin, who was hellbent on expanding the firm’s operations in Australia and overseas at what was the peak of the 1980s stockmarket boom. Jacksons would become the first Australian
stockbroking firm to be publicly listed, and it boasted branch offices in Melbourne, London, Paris, Munich and Hong Kong. Graeme Kirke says he wasn’t surprised the precocious Forrest left his firm to accept Pfafflin’s offer to run his own operation, even at the age of twenty-four. “I don’t think Andrew could ever work without being the intellectual driving force,” he says. Another of Forrest’s
colleagues from that era marvels at his audacity in taking on the establishment after he’d been in the industry for only three years. “That was something adults did – not 24-year-old blokes,” he says.

The fit between Jacksons and Forrest was perfect. Jacksons had grown in the 1980s by backing many of the companies the establishment frowned upon, including Alan Bond’s Bond Corporation. “Jacksons
were go-getting blokes who wanted to take broking away from the old-school-tie environment,” says former employee Peter “Cabbie” Richard. “They were never going to get business out of the conservative Collins Street in Melbourne, but as resources developed in WA, that created a whole new breed of people and they’re the people that Forrest represented. Forrest was the start of the era where
you had to be innovative, the resources industry was going up and you had to be in the middle of it.”

At Jacksons, Forrest assembled a team of Perth whiz-kids who were fast-talking, hard-living and hungry for the next deal. The most colourful of the pack – which came to be known around town as the “Jacksons Five” – was the Ferrari-driving Dave Rigoll, who started out working as a plumber
but got his break in the early 1980s when he was hired by Laurie Connell as a merchant banking junior at the ill-fated Rothwells.

Rigoll was often the last man standing, accompanied by a bevy of beautiful women, at the trendy Club Bay View in Claremont, where the cashed-up Jacksons boys would order “squadrons” of twenty-four drinks at a time. “Andrew idolised Dave,” says a friend from that
era. The super-slick salesman went on to make hundreds of millions of dollars through a Kazakhstani oil venture and at one point boasted houses in London, Dubai and the Swiss tax haven of Zug. And he never quite stayed out of trouble, attracting headlines in 2007 when he was implicated in a major share scandal at one of his London-based oil companies.