Nathan Tinkler put his faith in the wrong people and was left "holding the can" over a failed deal that forced one of his companies into liquidation, a court has heard.
The besieged mining mogul made the claims as he faced the NSW Supreme Court on Thursday to be grilled about his finances by liquidators for his mining company, Mulsanne Resources.
The one-time youngest billionaire in Australia said he had "had no definitive plan" for funding a $28 million deal to buy a one-third stake in junior miner Blackwood Corporation with just a week to go before the debt fell due in July 2012.
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However Mr Tinkler told counsel for Mulsanne's liquidators, Robert Newlind, SC, he had had "a clear path" to fund the deal by selling his 75 per cent stake in a $25 million coal royalty to commodities trader Noble Group.
That sale did not eventuate and the court heard no documentation of the discussions between Mr Tinkler and Noble Group director William Randall had been produced, he said.
"Noble's funding fell away for that and I got left holding the can for the subscription (for Blackwood shares)," Mr Tinkler said.
Asked by Mr Newlind what he had done to raise funds as the deadline approached, Mr Tinkler said: "I put my faith in the wrong people".
The court heard Mr Tinkler was discussing another deal involving Noble Group and Blackwood buying Australian coal assets from Brazilian mining giant Vale as the July 19 deadline for the Blackwood deal loomed.
"We were looking to make Blackwood a significant company," Mr Tinkler said. He had hoped Noble Group would buy his coal royalty as the deadline approached, despite having no agreement for the deal from the other 25 per cent stakeholder in the royalty, his former business partner Matthew Higgins.
Mr Tinkler said he also had talks about finance with investment banks UBS, Credit Suisse and Bank of America-Merrill Lynch. He said he had discussed with UBS using three houses held in his wife's name - two in Newcastle and one in Brisbane and collectively worth nearly $20 million - as security. The packed courtroom heard no notes about those discussions had been found.
Mulsanne was placed in liquidation last November after the Blackwood deal fell through. Mr Tinkler, 37, returned to Australia from Singapore for the court examination after the liquidators' lawyers threatened to seek his arrest if he did not appear.
Wearing a black suit and looking slimmer than his last public appearances, Mr Tinkler made no comments and smiled as he made his way through media scrums outside the court.
In court, Mr Tinkler gave a Singapore address and described his occupation as "director".
He prefaced each answer with the word "privilege", which registrar Jennifer Hedge instructed him would mean his answers could not be used in any criminal proceedings.
Mr Tinkler's lawyers failed in a bid to have the questioning abandoned earlier in the week.
The examination continues on Friday.
