THE former head of billionaire Nathan Tinkler’s Aston Resources has begun a legal case that exposes the company to a possible $189 million payout.
Hamish Collins claims he is entitled to an ‘‘equity participation’’ provision from Aston Resources equivalent to 5per cent of the value of the company’s main mining assets.
The statement says an alleged employment contract breach cost Mr Collins between $125.9million and $188.9million.
Mr Tinkler is the chairman of Aston Resources and major shareholder.
The action comes in a tumultuous week for Mr Tinkler as his Hunter Sports Group faces a possible lawsuit from Football Federation Australia that could result in the governing body chasing up to $100million in damages after Mr Tinkler’s decision to cut his ties with the Newcastle Jets.
Aston Resources is in the process of a takeover bid by Whitehaven Coal.
Directors of both companies have recommended to their shareholders that the $5.1billion merger proceed. There is a meeting set for Brisbane on Monday to vote on the deal.
The lawsuit by Mr Collins may become one of Australia’s largest claims for breach of an employment contract.
Solicitors acting for Mr Collins have filed proceedings in the NSW Supreme Court relating to his alleged entitlement, Aston said yesterday.
Mr Collins was chief executive of Aston Resources from 2008 to 2010.
He left the company before its public listing on the Australian Securities Exchange to head MM Mining, an unlisted company within the Tinkler Group.
His tenure there ended in September 2011.
Former National Party leader Mark Vaile is Aston’s deputy chairman.
The company has said it acted properly and in a way that was consistent with Mr Collins’s terms of employment.
‘‘Aston Resources intends to vigorously defend these proceedings,’’ it said yesterday.
* Neil Goffet is a shareholder in Whitehaven Coal.