Joseph Gutnick

Australian rabbi, mining financier and Chabad-Lubavitch donor, known as "Diamond Joe"; bankrupt 2016–2018 after litigation with an Indian fertiliser cooperative

Joseph Gutnick
Nationality	Australian
Occupation	Rabbi; mining executive; philanthropist
Known for	Great Central Mines; Dow Jones v Gutnick; president of Machne Israel in Australia; 1996 pro-Netanyahu campaign
Spouse(s)	Stera Gutnick

Joseph Gutnick (known as Joe Gutnick and, in the Australian press, "Diamond Joe") is an Australian rabbi, mining financier and benefactor of the Chabad-Lubavitch movement. He built his fortune in the late 1980s and 1990s through Great Central Mines and later Legend International Holdings, was president of the Melbourne Football Club, and has been a party to a series of high-profile court cases, among them the High Court of Australia decision Dow Jones v Gutnick on internet defamation. He declared himself bankrupt in July 2016 and was discharged in 2018. Within Chabad he is associated with Machne Israel and with the movement's political advocacy of "the integrity of the Land of Israel" (see Chabad and Israeli politics).

Mining career

The Sydney Morning Herald (SMH) reported that Gutnick, a Melbourne rabbi whose business career had been "nearly wiped out" by the 1987 sharemarket crash, took the advice of the Lubavitcher Rebbe Menachem Mendel Schneerson to look for gold and diamonds in Western Australia; his company Great Central Mines found diamonds and gold at separate mines, and he joined the rich lists. The paper reported that the collapse of the nickel miner Centaur Mining in 2001, "under a mountain of debt", ended his place on the list.

Great Central Mines takeover

In June 1999 Justice Merkel in the Federal Court found that Yandal Gold Pty Ltd, Edensor Nominees Pty Ltd (the trustee of the Gutnick Family Trust) and subsidiaries of Normandy Mining Ltd had breached the takeover provisions of the Corporations Law over the takeover of Great Central Mines, and ordered Edensor to pay shareholders $28.5 million, according to a release by the Australian Securities and Investments Commission (ASIC). The Full Federal Court held in December 1999 that the Federal Court lacked power under the Corporations Law to make that order, but said Edensor remained obliged to pay as if the order had been made by the Supreme Court of Victoria. SMH summarised the outcome as Gutnick and his business partner Robert Champion de Crespigny having been "found to have disadvantaged investors in Great Central Mines to the tune of $28.5 million".

Melbourne Football Club

SMH reported that Gutnick was elected president of the Melbourne Football Club, and a photograph caption in the same article records him "fighting his AFL club Melbourne's planned merger with rival Hawthorn in 1996".

Litigation

The SMH described Gutnick's career as "marked by fantastic booms and catastrophic busts", with litigation often following.

Dow Jones v Gutnick

Gutnick sued the publisher Dow Jones over an article published on its website. In Dow Jones and Company Inc v Gutnick [2002] HCA 56 (10 December 2002) the High Court of Australia unanimously dismissed Dow Jones's appeal. The leading judgment held that "ordinarily, defamation is to be located at the place where the damage to reputation occurs", which for web material is where it is downloaded in comprehensible form, so that Victorian law applied to the article "Unholy Gains" in Barron's Online.

Loan to Yeshiva College Bondi

SMH reported that in 2003 Gutnick won a New South Wales court ruling over a loan to Yeshiva College in Bondi, which, with interest, had reached about $15 million; his sister Pnina Feldman and her husband Rabbi Pinchus Feldman refused to accept the ruling and threatened to refer the dispute to a rabbinical court in Israel. Gutnick relied on the principle "dina demalchuta dina" ("the law of the land is the law"), which, SMH said, "inflamed and divided" his community. The institution is covered on Yeshiva Centre Bondi.

Sale of shares to Roy Raphael Tashi (2013)

On 4 September 2013 the Australian Jewish news site J-Wire reported that Justice Ross Robson of the Supreme Court of Victoria had found Gutnick engaged in misleading and deceptive conduct in a $1 million sale of shares in Northern Capital Resources Corporation to Roy Raphael Tashi, a fellow Lubavitcher and a director of Chabad House Malvern. J-Wire quoted the judge as describing "predatory behavior", reported that the sale was voided and $1 million plus interest was repayable, and that Gutnick denied wrongdoing and said he would appeal. J-Wire describes Northern Capital Resources Corporation as a Canadian gold-mining company; Chabad and fraud currently describes it as a US company. The judgment ([2013] VSC 446) could not be opened when this draft was prepared, and the outcome of any appeal is not established in the sources consulted.

IFFCO and bankruptcy

SMH reported that the Supreme Court of Victoria upheld a Singapore ruling that Gutnick had made fraudulent misrepresentations in a deal with the Indian Farmers Fertiliser Cooperative (IFFCO) involving Legend International Holdings; before the trial Gutnick said the Singapore ruling was "contrary to the public policy of Australia and the rules of natural justice". The news site TOTPI reported that Gutnick declared himself bankrupt on 8 July 2016 with debts of about $275 million, appointing Gess Rambaldi and Andrew Yeo of Pitcher Partners as trustees; it listed 25 creditors including his wife Stera ($30.7 million), Machne Israel ($13.3 million) and IFFCO ($54 million), and said Legend International had been wound up on 6 June 2016.

At a Federal Court examination in April 2017, reported by TOTPI, Gutnick said the Rebbe had lent him US$10 million in 1988 through Machne Israel, and that he had given more than $100 million to Chabad; Machne Israel had lodged a claim of US$42.7 million shortly before the bankruptcy. He described some of the questions as "outrageous". SMH's account of the 2018 discharge says he settled with creditors owed $175 million, disclosing debts of $305 million, and that the trustee expected a dividend of "less than one cent in the dollar" to participating creditors, while "related parties" agreed not to participate. Gutnick is quoted there as saying: "I don't believe I was in any financial stress until IFFCO came along with their false claims." (The two reports give different totals for his debts: about $275 million at the declaration in 2016 and $305 million in the trustee's 2018 statement.)

Chabad activities

1996 election campaign and the "integrity of the Land of Israel"

In an interview with Israel National News in August 2022, Gutnick described the 1996 campaign encouraging Israelis to vote for Benjamin Netanyahu, under the slogan "Netanyahu is good for the Jews", as a mission given to him by the Rebbe, to achieve "a narrow strong right-wing government". J-Wire described him as the Rebbe's "special emissary to the integrity of the Land of Israel". The campaign and the book Shleimut HaAretz are covered on Chabad and Israeli politics, Chabad messianism and Shleimut HaAretz.

See also

• Chabad Lubavitch of Australia
• Machne Israel
• Yeshiva Centre Bondi
• Yeshivah Centre Melbourne
• Chabad and Israeli politics
• Shleimut HaAretz
• Chabad and fraud
• Friends of Mayanot Institute