Angus Taylor, Barnaby Joyce and an $80 million water leak

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Cartoon by Bruce Keogh / keoghcartoons.com.au

Former Water Minister Barnaby Joyce spent $80 million buying back floodwater from a Cayman Islands company set up by Energy Minister Angus Taylor. The Twitter sleuths who first uncovered this controversy, Jommy Tee and Ronni Salt, report exclusively for IA.

Australia: July 2007

It was a winter’s day in July when an agent from Allan’s Off The Shelf – a firm specialising in setting up and registering companies – visited the Australian Security and Investment Commission (ASIC) offices and lodged a set of registration papers, paid the requisite fee, and established a new company. 

The company that was born that day was Eastern Australia Agriculture Pty Ltd (EAA) and its owners likely held lofty ambitions for its future success.

Cayman Islands: December 2007

It is tourist high season in the Cayman Islands and just over two weeks out from Christmas. Even with Christmas approaching, there is no let-up for the company registration clerks of the Cayman Islands General Registry. Their days are full constantly processing new company registrations — on average 10,200 new registrations are processed each year.

On 6 December, the clerks register two applications with the following Cayman Islands registration identification numbers: 200737 and 200739. Again, the owners of these two companies, like any other company owner, likely dream that they will be profitable and successful. 

The respective names of the two companies are Agricultural Managers Limited (AML) and Eastern Australian Irrigation Limited (EAI).

The newly formed Australian company and the two in the Cayman Islands with their respective business addresses some 14,000 kilometres apart, would, in the ensuing months and years, become mutual partners in ambition — seeking to become Australia’s largest water holder and cotton irrigator.

Australia: March 2008

Despite the announcement by then Prime Minister John Howard in 2007 of the $10 billion National Water Plan – including $3 billion in funding for water buybacks – many irrigators were still doing it tough financially. 

This was especially so for some large-scale water and cotton irrigators in the regions of St George and Dirranbandi, Queensland — the heartland of then Queensland Senator Barnaby Joyce.

A number of properties were on the market, including Kia Ora, Clyde and Cubbie Station. They say one should buy low and sell high so when two of these properties came up for sale, together with a government chum bucket of $3 billion of water buybacks about to be opened, an audacious business strategy was hatched — a strategy, if the cards were played right, that could result in a juicy profit.

The company with lofty ambitions from the outset, EAA, takes the plunge and within the space of weeks buys both Clyde (6 March for $31 million) and Kia Ora (20 March for $66 million). For a company that used Allan’s Off The Shelf to register, that’s a big play in anyone’s language, outlaying a total of $97 million in a month.

The remainder of 2008

The $97 million deal engineered by EAA, not surprisingly, requires financing and funding — that funding would be delivered by the company from the Cayman Islands with a very similar sounding name, EAI. Two ambitions now become one.

In June, the original directors of EAI depart the scene, their job in establishing, registering and nursing the company now complete.

A man from a management consultancy background now steps in, becoming both EAA’s company secretary and director. That man is Angus James Taylor.

In fact, for the period 26 June to 10 November, Taylor is the sole director of the company, until Matthew Bickford-Smith is onboarded as a fellow director in November.

EAA lodges its first annual report for 2008, having conducted very little business activity until it made the $97 million purchase.  The annual report confirms that EAI is the parent entity and owns 100 per cent of the shares of EAA. 

The annual report also exposes how highly geared EAA is to its Cayman’s parent company EAI, including EAA issuing $69 million of convertible notes to EAI.

By the end of the year, EAA has gone from the little company that could, to the company that now owns two of the largest water and irrigated crop properties in Queensland.


EAA uses the year as one of consolidation, biding their time until the government’s water buyback policy and its associated pot-of-gold funding come on stream. Besides, there are crops to be sown and harvested on the properties and a need to bring in another director with farming experience, Peter Cottle, to join the existing two directors in running the company.

Other key personnel with farming backgrounds are also co-opted as farm consultants: Tony Reid and Geoff Daniel. Both Reid and Daniel are employees of Growth Farms Australia, which provided consultancy services to EAA under a normal arrangement of commercial terms and conditions.

Growth Farms Australia has strong Taylor family connections. Angus’ brothers Richard and Duncan were directors of the company at the time, and Angus through his personal company Gufee Pty Ltd was, at the time, and still is, a shareholder. Indeed, an assortment of Taylors (and Taylor's life-long business colleague Tony Reid) either directly, or through the companies they are associated with, continue to have an active interest in the running of Growth Farms Australia.

In 2009, EAA also entered into a consultancy arrangement with both Angus Taylor and Matthew Bickford-Smith, again under normal commercial terms and conditions.

As we approach the end of the year, the enterprising Angus Taylor ceases to be a director of EAA in November. He now establishes two new companies: Agriculture Managers (Australia) Pty Ltd (AMA) and Australian Agricultural Securitisation Pty Ltd (AAS). The names of the companies closely resemble that of the Cayman Island-based company, Agricultural Managers Limited

As it transpires, ASIC records reveal that Taylor was the sole director and company secretary of both AMA and AAS and that the parent entity of both was the Cayman-based AML.

2010 to 2012

While Taylor had ceased to be a director of EAA, the new entity AMA continues to be actively involved in the management of the properties. Various national and rural newspaper articles at the time quote Angus Taylor in connection with both EAA and AMA, and highlight that AMA manages the EAA properties.

Rolling out those government water buybacks is also taking much longer than expected. As a result, Cubbie Station is under severe financial pressure and is on the market.

The combination of a distressed asset sale of Cubbie and pending lucrative water buybacks presents a possible once-in-a-lifetime business opportunity.

EAA launches a brazen strategy to double down and try and buy Cubbie Station which has Australia’s largest water holdings and entitlements. Many others see the same thing and there is keen interest in getting hold of Cubbie at a bargain price, and cashing in on its water entitlements.

EAA is so bold that according to the Sydney Morning Herald, it enters into discussions in early 2010 with the Federal Government and makes an unsolicited offer — that offer is gobsmacking. The offer is that should EAA buy Cubbie, they would then sell 92 gigalitres of water to the Federal Government — contingent on a successful bid by EAA to purchase Cubbie.

The Federal Government was quick to rule out the deal and launched a more formal and accountable water buyback scheme for the Balonne region worth $100 million — a process that would focus on smaller strategic buybacks, not one that delivered a windfall gain to large speculators.

Those discussions between EAA and the Federal Government do, however, reveal the motivation for establishing AMA and AAS.  They were to be part of the corporate and financing structure that would underpin the purchase of Cubbie Station. 

So how do we know that? 

During the course of our research, we have obtained a copy of AML’s (the Cayman entity) slide pack from January 2010 that details the proposed inter-relationships of AML, AMA and AAS in financing the Cubbie purchase. It is a complex structure, wherein AMA and AAS – the companies of which Angus Taylor was the sole shareholder – would derive fees and form an integral part of the financing deal.

The following diagram lays out the proposed structure:

Diagram: Supplied 

Interestingly EAA’s 2010 Annual Report again reveals that Messrs Taylor, Bickford-Smith and Reid (with his Growth Farms Australia hat on) provided consultancy services to EAA — again under normal commercial terms and conditions.

With the water buybacks now looking like a drip feed instead of a torrent of cash  EAA’s plans to buy Cubbie Station are ditched.

Taylor is of course now no longer director with EAA, having resigned his position in late November 2009 to structure the proposed Cubbie Station purchase.

Taylor stays involved in EAA by joining the big league, still listed as part of EAA’s key management personnel but now as a director of no less than the Cayman’s based parent entity EAI. ASIC records reveal that he was listed as a director of the EAI in the EAA annual reports of 2011, 2012 and 2013.

Taylor holds onto both AMA and AAS (remembering that those companies' parent company is the Cayman Island-based Agricultural Managers Limited) until October 2012, when they are deregistered. This is perhaps in the vain hope that large scale water buybacks will be resurrected, but it becomes academic as Cubbie has at last found a buyer and is sold in January 2013.

2013 onwards

The grand ambitions of both EAA and EAI are now taking a hammering, the properties are periodically put on the market and fail to sell, and the water buybacks seem a distant memory. EAA’s debt to EAI does not appear to be going away either and what originally appeared as a cash cow opportunity is fast going the way of Cubbie — a haemorrhaging enterprise.

Angus Taylor is no longer listed as a director of the Cayman-based EAI in the EAA’s 2014 Annual Report and enters Federal Parliament in September 2013 as the Member for Hume. In the lead-up to the 2013 Election, EAA donates a total of $55,000 to the NSW branch of the Liberal Party.

It would not be until 2015 that the fortunes of EAA and EAI changed, a time that coincides with Barnaby Joyce becoming the minister with responsibility for water. Joyce would ditch his long-held opposition to water buybacks and take-up an unsolicited offer from EAA — a deal that resulted in the Coalition Government paying $80 million to EAA. This deal that attracted much ire and controversy when it was concluded and made public in July 2017. 

Matthew Bickford-Smith and Peter Cottle were EAA’s signatories on the relevant contracts. Tony Reid was both an adviser to EAA and EAI during the buyback process and involved in discussions between with Department of Agriculture and Water Resources during the negotiation phase.

After a series of allegations are made about the water buyback deal on Twitter in mid-April 2019, a spokesperson for Angus Taylor announces to Buzzfeed on 17 April 2019:

Allegations currently online that link Minister Taylor with EAA’s sale of water entitlements are incorrect.

Minister Taylor has not had any direct or indirect financial interest in EAA or its parent company at any time. He has never been a shareholder or held an equitable interest in either company. He severed all advisory ties with EAA well before entering Parliament.​​​​​

You can follow Jommy Tee and Ronni Salt on Twitter  @Jommy_Tee and @MsVeruca.

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