Private Until Capital Forces Public

“Apart from the brief period when CPI had been a public company, Stokes had always liked to hold his wealth in private companies, and he continued to prefer it in the years ahead. Naturally private and suspicious, he put as little information on the public record as he could get away with. Rather than ‘pyramiding’, like so many entrepreneurs of the 1980s, in which complex public company structures kept control in a few hands with little cash laid out up front, Stokes at this time used public companies only when he needed to raise big capital, or when he had little choice. He liked control, he liked prudence, and he liked privacy – none of which has prevented him, in more recent times, from dealing ruthlessly with the public companies he has controlled.”

“In 1972 Stokes was travelling overseas to seek investment. Soon the Hong Kong and Shanghai Banking Corporation was involved as a shareholder and provider of mortgage finance, and a group of investors from Bermuda were represented on the board. So began a pattern in Stokes’ business career: shuffling assets between public companies he controlled and his private companies, always with the result that he increased his personal wealth. Those who knew them at the time say that Stokes and Bendat were on a learning curve. ‘It would be, “Oh, can we do this?” They didn’t really have a strong sense of the rules, but they both learned fast.’ The 1972 CPI report shows that the board approved the purchase of Dianella Plaza from a Bendat and Stokes company. ‘The Chairman, Mr Bendat, and the Managing Director, Mr Stokes of CPI, are also directors of the vendor company, and because of the situation, both abstained from voting in the Board’s decision to acquire this project.’”