Category: Articles

ASIC knew, and did nothing

ASIC have known since at least 31 January 2020 that Sargon’s Q4 2019 interest owing to China Taiping was fully paid, yet in the 18 months since, do not appear to have taken any action which might put things right and stop this from happening again.

On the afternoon of 10 August 2021, Tim Wilson MP presented documents to Parliament that he stated “appear to indicate that there has been a deliberate campaign to trigger the receivership of Sargon by China Taiping.” I’m yet to see the documents Mr Wilson MP has tabled myself however Anthony Galloway of Fairfax has reported on the proceedings in the Sydney Morning Herald and the Age (as has the courageous independent news site, Mirage News).

As I told Mr Galloway when he sought my comment on Mr Wilson MP’s speech, I can’t comment on documents that may potentially be relevant to active litigation or investigations. However, readers of my website will probably not be surprised by the allegations contained in Mr Galloway’s article. Despite Ashurst and China Taiping’s best attempts to cover it up, it’s always been obvious that Sargon paid up interest on the Promissory Note in December 2019. Myself and other directors and officers of Sargon have been consistent about this all along, including to employees, administrators, investors, clients and regulators such as ASIC and APRA. Yet, nobody seemed to care, given how expertly China Taiping’s pawns have steered the public narrative.

Now that Parliament appears to be exploring this inconvenient truth, both China Taiping and Ashurst have been resoundingly silent. 

To try to save face publicly, they’ve trotted out Shaun Fraser of McGrathNicol. Speaking to the Sydney Morning Herald, he’s provided the following statement for publication:

Receiver Shaun Fraser, from Mcgrath Nicol, said the appointment of receivers was the “only available option to the lender after efforts to engage with Sargon on the payment defaults and the issuing of formal demands by the lender’s lawyers proved fruitless”.

“Throughout this time Sargon was unable to clarify how it would resolve the default,” he said.

“It is important to understand that Taiping Trustees was fully entitled under its loan facility and related security agreements to appoint Receivers for the purpose of preserving its own position and pursuing the recovery of funds.”

China state-owned lender firm named in Parliament for deliberately bankrupting Australian company, Sydney Morning Herald (10 August 2021)

Let’s break this down. 

[…] the appointment of receivers was the “only available option to the lender after efforts to engage with Sargon on the payment defaults” 

It’s not clear to me if Mr Fraser read Mr Galloway’s article before providing comment for it, and it’s even less clear to me what “payment defaults” he’s talking about given the fact that promissory note interest was paid up well in advance of his appointment.

It’s true that the interest payment for Q3 was delayed – this followed disclosure from China Taiping that they ‘may have’ syndicated or onsold the underlying promissory note exposure (through the Taiping Securities Fund) to one or more third parties, and failure by China Taiping to formally confirm or deny this and disclose who (if anyone) these new beneficiaries were despite repeated requests from Sargon and Trimantium. Ultimately, once Ashurst volunteered the use of their trust account to mitigate Sargon’s sanctions concerns, Q3 interest was paid along with Q4 into that trust account on 11 December 2019 (i.e. within days of Ashurst offering this solution, and well before Q4 was due on 6 January 2020).

Also, I’m not clear what “efforts to engage” he’s talking about. China Taiping appointed one of its officers, Andy Wang, as a director of Sargon in May 2018 and he continued to be an active board participant (and authorised officer of China Taiping) through to the date of Ashurst’s demands and the receivership itself. I always knew Mr Wang to be a highly educated, ethical, judicious, and competent director. Mr Wang had full access to and great relationships with Sargon’s directors, management, auditors, accountants, etc in the period leading up to receivership and if there were genuine problems in the China Taiping and Sargon relationship, his bilingual and incisive mind could have resolved them quickly. Why not use him?

To say that receivership was “the only available option” is categorically false. It is possible he was misquoted saying “the only available option [to generate fees for McGrathNicol]”.

and the issuing of formal demands by the lender’s lawyers proved fruitless”

This is even more bizarre. Firstly, no formal demands were made – the security documents between China Taiping and Sargon included clear notice provisions for all formal demands and notices, none of which were complied with by Ashurst.

Secondly – again – the demand purportedly made of Sargon on 20 January (immediately preceding McGrathNicol’s appointment), alleging that Q4 interest was unpaid and demanding immediate repayment of this allegedly unpaid amount plus the HK$500m principal (which was not due for at least another year) as a result of this ‘default’, was nonsensical once you consider the fact that the interest was already paid. The demand was wrong at best, and misleading and deceptive or outright fraudulent at worst.

For another example of Ashurst’s idea of ‘formal’ correspondence, see the attached where James Marshall responded to correspondence to China Taiping in Hong Kong by a Hong Kong law firm representing various Hong Kong entities regarding claims those Hong Kong companies are exploring against China Taiping and Ashurst LLP, where he invites them to request that I put forward a “repayment plan” more than a year after they blew everything up. Note that the law firm in question wasn’t acting for me personally at all (though they did have the courtesy to pass Mr Marshall’s correspondence along). Instead, Ashurst is trying to create evidence that I should personally underwrite HK$1,153,000,000.00 of their client’s foreign expansion costs and non-recourse corporate loans.

“Throughout this time Sargon was unable to clarify how it would resolve the default,” 

Quite right – Sargon had no idea how to pay an interest bill that had already been paid. Sargon was unable to clarify or even comprehend how Ashurst continued to demand interest payments that it had already received on behalf of its client – particularly when that was just one of many substantive errors in Ashurst’s correspondence. 

When I tried to speak to those instructing Ashurst directly to establish better communication and get to the bottom of things after Ashurst’s first demand in early December, I was told by Ashurst in no uncertain terms not to contact their client again. When I wrote to lead Ashurst partner James Marshall (Award Winner) following this, I received no response or acknowledgement. Yet McGrathNicol have said previously (and continue to imply) that Sargon and/or myself were at fault for the ‘lack of communication’ when Ashurst said to not speak to their client directly and Ashurst ignored substantive communication.

“It is important to understand that Taiping Trustees was fully entitled under its loan facility and related security agreements to appoint Receivers for the purpose of preserving its own position and pursuing the recovery of funds.”

This is an interesting one – to my knowledge, Mr Fraser isn’t a lawyer and has never received any legal training, so it’s bold of him to put forward a position as to China Taiping’s contractual rights. At the very least, he’s revealing that this role was more than just a receiver/agent (for which he’s likely indemnified), but also as an adviser (for which he’s probably not).

To date, I’ve assumed that McGrathNicol were duped in all this – Mr Fraser told me on the evening of his appointment that he “hadn’t had a chance to get [his] feet under the table yet”, that he wasn’t aware of the situation leading up to his appointment, and that he viewed his appointment as an “information-gathering exercise”. I figured that McGrathNicol were just going off of what Ashurst and China Taiping had told them, and didn’t have any first-hand involvement prior to their appointment.

However, now Mr Fraser is making assertions as to China Taiping’s rights (on the implicit – and untrue – assumption that “payment defaults” subsisted). He’s also said the appointment of receivers was the “only available option to the lender” – how could he possibly come to this view unless he was intimately involved in advising China Taiping prior to his appointment? One has to wonder at the conflicts involved in advising somebody that their “only available option” was to hire you to execute this “solution”. 

Summing up

All in all, Mr Fraser’s comments just don’t make sense. He continues to insist China Taiping was in the right, seeking to remedy “defaults”, but doesn’t even engage with the reality that the Promissory Note wasn’t in default. It’s not clear if he’s just unwilling to consider that his client (and possibly his deal pipeline friends at Ashurst) lied to him (and he was too naïve to check), or if he’s in too deep to get out now – particularly given he’s previously been China Taiping and Ashurst’s mouthpiece in their failed Mareva injunction (and also to Sargon’s liquidators, Wexted Advisors, and regulators such as ASIC and APRA).

Ashurst seem to be in a rather similar position themselves – unwilling to comment publicly, but still doing their utmost to reputation-manage behind the scenes through threats of legal action and whatever other means are available to them. Assuming they weren’t previously aware that their client lied about the Q4 interest default, you have to wonder why they haven’t walked away by now – particularly given that word on the street is that they’re struggling to get their invoices paid (after running up millions in legal fees for negative net recovery, you can’t really blame China Taiping). 

Ordinarily, a liquidator would have investigated both Ashurst and McGrathNicol’s conduct long ago. Conveniently for them, they got to pick and choose Sargon’s liquidators, appointing Joseph Hayes and Andrew McCabe of Wexted Advisors. As McGrathNicol had already stripped the Sargon cash their appointment managed to secure, Wexted relied upon a miserly $50,000 indemnity from China Taiping for their costs of administration – that’s barely enough to properly liquidate a corner store, and you’d expect insolvency practitioners to know a thing or to about adequacy of funding. The starving of funding is a great way to guarantee no resources are available to investigate the malpractice of the receivers.

A quick dip into Wexted’s conflicts declaration (or ‘DIRRI’) discloses that they’ve got longstanding commercial relationships (i.e. referral co-existence arrangements) with both Ashurst and McGrathNicol, and both Mr McCabe and Mr Hayes were former McGrathNicol employees (in fact, as of their appointment, both had worked at Wexted for far less time than they’d previously spent at McGrathNicol).

ASIC knew, and did nothing

You have to wonder where ASIC is in all this – after all, they’re meant to regulate the conduct of insolvency practitioners as well as financial services businesses and companies more generally. ASIC was told on 31 January 2020 and 3 February 2020 by myself and other directors and officers of Sargon that Q4 interest was paid, yet decided Sargon’s board and management couldn’t be trusted on the basis of Ashurst’s fraudulent demands and McGrathNicol sharing China Taiping’s ‘concerns’ through back channels. 

What kind of world do we live in where ASIC ignores direct, unanimous and contemporaneous evidence from 6 Australian citizens – our CEO, CFO, COO, CRO, General Counsel and a high profile Non-Executive Director in favour of a foreign power and their local rent-seeking enablers?

Concerningly, probably the only organisation with the power to actually stop this at the time sat back and let a Chinese SOE destroy an Australian-grown company, based on nothing but McGrathNicol’s word. Coincidentally, ASIC’s ‘Senior Executive Leader’ in charge of its oversight of insolvency practitioners, Thea Eszenyi, was at McGrathNicol for over a decade immediately prior to her appointment to ASIC making her a longstanding colleague of Mr Fraser, Mr Preston, Mr Hayes, and Mr McCabe.

Nearly 18 months has passed since ASIC learned of the needless destruction of Australian investors’ money on a fact pattern that was dubious and inconsistent at best and ASIC has not even levied a single utterance of a question at Sargon’s officers to try to ascertain what happened, how it could have been avoided, whether the receivers acted lawfully or otherwise.

The question for ASIC now – particularly given Parliament seems to have taken note – is whether they’ll come clean and do their jobs, or keep trying to cover up on behalf of their old colleagues.  

China Taiping continues to pay for Ashurst’s incompetence

On the 28th of June 2021, Ashurst Australia paid me $46,000 for costs awarded against their client China Taiping in a hearing before the Supreme Court of New South Wales. The judgement is available here.

This $46,000 plus the hundreds of thousands (or more) of Ashurst’s direct and indirect costs to China Taiping could have been avoided if their lawyers were competent. China Taiping, please learn from your mistakes – using Ashurst is just too costly, not in terms of hourly rates, but in terms of the amount of new and innovative loss they can create for their clients, and in Sargon’s case, the wider Australian economy including Westpac and 30+ individual investors.

Why did Ashurst send me this money?

After blowing up Sargon by appointing Receivers in January 2020, Taiping so far has recovered less than A$4 million (before the costs of multiple court hearings), compared to the A$113 million they’d invested in Sargon (primarily in equity exposure).

This A$109 million+ loss is directly attributed to Ashurst’s advice to appoint Receivers in apparent ignorance or disregard of their client’s investment position. The first and most natural consequence of any receivership appointment over a company is to devalue equity in the company (generally to nil) and destroy the rights attached to that equity. When your exposure is many multiples more equity than it is debt, and there’s nothing materially wrong with the business, you do not appoint receivers.

When you are Ashurst, and you had one job to do, and you fail to the tune of more than $100 million Australian dollars, you need to find someone to blame. They decided to go after me – which has started to prove to be a mistake for them, given litigation actually requires evidence to succeed, as opposed to spurious allegations with no basis. This hasn’t stopped them with briefing journalists directly and indirectly with their fabricated stories and threatening “to destroy them” if they write anything else.

Blame

Over half a year after appointing Receivers and still no closer to any meaningful recoveries, Ashurst were scrambling for alternative recoveries and filed litigation against me in the Supreme Court of New South Wales regarding a HK$653m financing facility between ten (10) entities, including myself, a joint venture entity with China Taiping themselves, an entity associated with Dr Aron Ping D’Souza, a Hong Kong entity which China Taiping were a primary beneficiary of, and China Taiping’s subsidiary China Insurance Group Finance Company Limited (“China Insurance”, another of China Taiping’s business fronts, along with the now-well-known Taiping Trustees Limited).

Financial Substance

Sargon was not a party to this financing agreement, however the facility was used by China Taiping to gain exposure to Sargon equity via trusts and share pledges (which constituted ~80%+ of the security and accounted for ~25% of the funds deployed under the facility). Ironically, this means that, by advising that Taiping Trustees to appoint Receivers over Sargon, Ashurst destroyed the security position of their other client, China Insurance, under this larger HK$653m facility. Perhaps the eight-month delay wasn’t to prepare for the litigation, but to figure out how to let their client know what they’d done. Specifically the security that Ashurst blew up in an instant took me and a hundred others 6 years to build, cost hundreds of millions of dollars and was worth many multiples of the total facility size at their own valuations that they routinely provided to their own internal and external auditors.

Ultimately, they destroyed more than 80% of the security and then seemed to ignore the remainder, instead deciding to sue me personally despite me not personally holding any of the security pledged under the facility, nor having any personal benefit of the money originally advanced, nor holding any of the investments made through it. The first thing Ashurst did on their crusade against me was to rush through an urgent “freezing order” application. Ashurst’s great legal minds had determined that it was now (after eight months) extremely urgent to freeze my assets – so urgent, in fact, that they tried to make their application ‘ex parte’, meaning I wouldn’t even have a chance to present a defence. Thankfully, the judge must’ve realised something was fishy, because they refused to do that and ordered a contested hearing instead.

What did Ashurst claim?

Obtaining a freezing order is considered ”drastic” and requires more than just a claim that money’s owing – China Taiping needed to establish some form of imminent threat that I’d dissipate my assets (those that they hadn’t already destroyed1) or that my “probity could not be relied upon” (in other words, I couldn’t be trusted). After almost nine months of prep time, this is what Ashurst came up with:

  • McGrathNicol, following their appointment as receivers over Sargon Capital, expressed “concern that funds may have been misappropriated or misdirected” by me from Sargon.
  • I had not “acceded fully” to requests by McGrathNicol regarding the Sargon receivership.
  • I don’t own any real estate in Australia and “may” have structured my affairs to avoid ready identification of my assets.
  • I’d “appeared” to evade service of China Insurance’s lawsuit.

Note that the quotation marks above were the judge quoting the exact words used by China Insurance’s barrister, presumably to emphasise just how equivocal and speculative they were. In support of these “arguments”, Ashurst presented the following “evidence”:

  • An affidavit from each of Shaun Fraser and Jason Preston of McGrathNicol (who’d each taken personal liability upon accepting the receivership appointment, had their bills paid by China Taiping, were referred by Ashurst to this opportunity, and are routinely referred work by Ashurst) where they noted that they’d failed to trace parts of the first A$50m drawdown under the HK$500m (~A$81m) promissory note and alleged that these “funds may have been misappropriated or misdirected”.
  • An allegation that I had somehow ‘misled’ China Taiping when drawing down the remaining A$31m.
  • An allegation, based on evidence given to the court by the Receivers, that I had changed the trustee of the Trimantium Sargon Investment Trust after the receivership appointment to “obstruct” the Receivers.
  • An allegation that I’d invested the funds under the facility ”in companies which [I have] no known legal relationship”.
  • An affidavit from a process server indicating they’d tried an intercom at my old address a few times and received no response.

What actually happened?

Every single one of these attacks on my character were rejected by the Court.

When it came to misdirecting money, China Insurance’s barrister conceded in court that the Receivers didn’t actually know what had happened with the money they’d failed to trace – in other words, they were jumping to defamatory conclusions with no basis beyond their own inability to do their jobs. In fact – as China Taiping would have known – the entirety of that A$50m drawdown is ultimately traceable to Trimantium Taiping Investment Management’s investment in A$50m of Sargon seed preference shares, as directed by China Taiping, clearly stated in the drawdown request signed by China Taiping, and negotiated extensively between the parties and their lawyers in the first half of 2018.

What’s more, these shares were still owned by Trimantium Taiping Investment Management (by then renamed to Trimantium Investment Management) when Shaun Fraser and Jason Preston were appointed receivers over it. The assets were in their possession all along – perhaps they’d conveniently overlooked them because their value immediately became zero when McGrathNicol accepted the appointment. Similarly, with the second drawdown, the investments made with it were ultimately held exactly where they were required to be, and were within the control of Shaun Fraser and Jason Preston when they made these affidavits claiming that the funds may have been misappropriated. It’s not surprising, then, that the judge concluded “I do not see the Receivers’ tentative conclusions to be a sound basis upon which to draw any conclusion about Mr Kingston’s probity”.

McGrathNicol’s concerning disconnect with the facts continued on to the ‘obstruction’ allegations – the change in trustee they swore to the Court occurred after their appointment had in fact occurred months before the appointment, and McGrathNicol were notified of this (and provided a copy of the relevant documents) months before they made their sworn affidavits. When this was pointed out, China Taiping’s barrister was put in the awkward position of trying to argue that while “the Receivers had been mistaken in their assertion that Mr Kingston had effected the change of trustees after their appointment  […] the change of trustees occurred around the time when China Insurance served notices of default on Mr Kingston2 [… therefore] Mr Kingston’s replacement of TCFM as trustee of the Trust should be seen as an example of him “obstructing” the Receivers (although they had not then been appointed).” The judge was clearly unimpressed: “In my opinion, it is drawing a long bow to conclude from these matters that Mr Kingston has acted in a way that suggests that his probity cannot be relied on”.

Ashurst’s remaining arguments were dismissed even more briefly: as my barrister pointed out to the Court, these entities I had ‘no known legal relationship with’ were all parties to the contract between myself and China Insurance. What’s more, I wasn’t the one investing through those companies – China Taiping was.

As to my failure to ‘accede fully’ to the Receivers’ requests, the Court felt it necessary to note: “Mr Hartford Davis [China Insurance’s barrister] did not develop this submission with great enthusiasm.

It’s not surprising Ashurst and Mr Hartford Davis appear to have parted ways on the case soon after (one of many times China Taiping have switched counsel; presumably they each got sick of getting embarrassed trying to salvage terrible briefs). Ultimately, “Mr Hartford Davis accepted that China Insurance could not point to any imminent threat of dissipation by Mr Kingston of his assets or of any “other special feature of the case beyond the Receivers’ expressions of concern.”

The judge then goes on to say “the “structure” [of my affairs] of which complaint is made is not identified, nor does China Insurance point to any relevant change in the structure brought about by Mr Kingston” – a very accurately worded observation, given the only relevant change to the structure was the destruction of Sargon brought about by Ashurst.  The final attack on my integrity, that I’d ‘evaded service’, was so thin that the Court concluded that “I do not see these matters as warranting a conclusion, nor even a suggestion, that Mr Kingston was “evading” service”.

In conclusion

To sum it up, each of Ashurst’s claims were either clearly wrong or lacked any evidentiary basis. Clearly, evidence is something that Ashurst considers only after making submissions to Court. Getting something wrong innocently in Court is not a crime, so to have that plausible deniability, they mustn’t want to see any evidence until they’ve settled their submissions and sent them off to Court – throwing both McGrathNicol and their barrister under the bus in the process.

These Big Law tactics to squash individuals are bundled up in the practice of “legal strategy” and resulted in the public being presented with a narrative that I had stolen money (in excess of A$40 million) and my probity was to be questioned, all in order to freeze my personal assets and put me on a stipend salary for the next 2-3 years. This means they can continue to defame and destroy my reputation, rebuild theirs, try to re-write the Sargon/China Taiping story as a success or at least legally justified all in the period were I have a limited ability to “fight back”.

Thankfully, judges still look at evidence, and ruled against China Insurance. The freezing order application was dismissed, and the judge awarded costs in my favour. In the end I got about 75% of my actual out of pocket costs.

Of course, Ashurst haven’t bothered to go back to all the people they tried spreading these “arguments” against my probity amongst (including all the media they’ve been briefing over the past eighteen months) to inform them the allegations they were spreading about my character were all dismissed. Neither has McGrathNicol retracted their “expressions of concern” regarding funds being misappropriated, which were ultimately without basis but nonetheless were spread amongst stakeholders and interested parties, including both Wexted Advisors (Sargon’s liquidators, who Ashurst referred for the appointment and then hung out to dry by having McGrathNicol take all the cash and leave Wexted with only A$50k for their costs of liquidation) and EY (who managed the administration of most of Sargon’s subsidiaries, opposed by China Taiping, and ultimately only managed to recover cents on the dollar through a distressed sale process that required an 11th-hour Federal Court application contested by Ashurst and China Taiping after they walked away from a deal that they had previously agreed to at the last moment).

With all the Promissory Note principal accounted for, McGrathNicol is left with nothing to justify their appointment except the alleged non-payment of interest in December 2019 – which, as I’ve previously stated, is as wrong as every other self-serving fabrication postulated by Ashurst and China Taiping. Sargon’s finance team authorised the now-infamous A$4.4m December payment on the basis it was for the Promissory Note (as Ashurst and China Taiping have had ample opportunities to confirm through examining Sargon’s books and records and examining its officers under oath at Public Examinations), and I’d always understood that China Taiping’s finance team applied it to the Promissory Note (given that’s what I was told by Taiping Trustees at the time). As I’ve discussed in previous posts, any other application by China Taiping of that A$4.4m of Sargon’s funds would have had no legal or commercial basis – Sargon didn’t owe any payment obligations to any company in the China Taiping group other than under the Promissory Note. Given that Ashurst was also planning the appointment of receivers over Sargon, you’d expect that they would have advised China Taiping of the risk of this payment being a recoverable transaction and unwound by Sargon’s eventual liquidators if misapplied. Ultimately, it’s worked out conveniently for them that they left Wexted unfunded.

If Ashurst continues with this haphazard litigation campaign they’ve started against Australian companies and citizens, I expect that final nail will come undone and they’ll no longer be able to hide the truth. At that point, this $46,000 will be a drop in the bucket compared to the eventual compensation they and their client will have to pay to the victims of their actions.

Ashurst’s “strategy” of having McGrathNicol phone up leaders in the Australian business community and telling them I stole money is going to come out, and it’s not going to be pretty for either of them.

Footnotes

1 I had invested 95%+ of my personal assets into Sargon between 2013 and 2019, the proceeds of all my prior entrepreneurial efforts and salary income.

2 This ‘fact’ is also untrue, which would have been obvious to Mr Hartford Davis if Ashurst had included a timeline of documents in his brief.

Building an Inferno Chamber

Disclaimer: Obviously, fires are intrinsically unsafe, so please don’t try anything like this at home especially outside of a controlled environment. Also, please be mindful of seasonal fire restrictions, local laws, fire regulations and common sense. Notify neighbours and fire departments before performing any large private burn that could create risk for the broader community. Don’t be stupid.

Galactic Bioware’s 66 square foot (10m2) ventilated Inferno Chamber is rated to temperatures of over 1,832℉ (1,000℃) for testing Power Suits against extreme temperature conditions, direct flame contact and smoke inhalation.

The Chamber is situated at approx 1,640 ft (500 metres) of altitude, average atmospheric pressure of 90kPa (0.94atm) with average temperature low/high range of 38.3℉ (3.5℃) to 54.7℉ (12.6℃). It is located in a region with very high rainfall, low average temperatures and low population density as a general safety precaution.

The facility is supported by 2 x 30,000L water tanks, 2 x water dams and a high-flow bore, as well as a gamut of safety features including temperature, O2, CO and CO2 diagnostics, extinguishers, fire blankets, high-flow shower and 24/7 video surveillance.

The Build

Some of the challenges with building structures for sustained 1,000℃+ temperatures are that many of the established construction methods and core materials do not like high heat. For example, concrete explodes at surprisingly low temperatures due to its water content and sudden rises in built-up pressure when heated. Yet concrete is one of the most frequently used building materials by mass – twice that of steel, wood, plastics, and aluminium combined. Wood is also not famously fire retardant. Mortar used between bricks behaves similarly to concrete at high temperature, although not as explosive.

Instead, high heat refractory fire bricks need to be used that are designed to endure high heat for a prolonged period of time. Air setting refractory mortar instead of cement and water based mortar must be used to bond together the fire bricks. This approach can withstand temperature up to ~2,700℉ (~1,480℃).

“Traditional” concrete foundation approaches can be used to support the fire brick walls but they need to be deeper to ensure there is at least 30cm of soil and firebrick wall between the lowest point of the fire / heat source and the highest point of the concrete. Basically – start the brick wall 3-4 brick rows lower than you normally would. Other than that, the fire bricks can be laid in a normal brick pattern and basically operate as such. For our specific requirements, we then installed a variety of specialist equipment to monitor the internal environment for accurate testing purposes.

Even with just wood as fuel, fires with enclosed walls on all sides of a person can get sufficiently hot to replicate truly dangerous environments. We use our high range k-type immersible thermocouples distributed across the Inferno Chamber to wait for the desired temperature gradient and make sure there is enough smoke to simulate a dangerous structural fire and then we’re ready to test the Galactic Bioware Power Suits.

Stay tuned.

Australia’s Berry Amendment

The Berry Amendment requires U.S. defense procurement come from domestic sources, Australia does not have an equivalent.

The U.S. protects its national interests and its domestic defense capability and capacity through a series of strict common sense procurement rules governed by legislation such as the Buy American Act and the Berry Amendment.

In order to protect the U.S. industrial base during periods of adversity and war, Congress passed domestic source restrictions as part of the 1941 Fifth Supplemental Department of Defense (DOD) Appropriations Act. These provisions later became known as the Berry Amendment. The Berry Amendment (Title 10 United States Code [U.S.C.] §2533a, Requirement to Buy Certain Articles from American Sources; Exceptions) contains a number of domestic source restrictions that prohibit DOD from acquiring food, clothing (including military uniforms), fabrics (including ballistic fibers), stainless steel, and hand or measuring tools that are not grown or produced in the United States. The Berry Amendment applies to DOD purchases only.

The [CRS] committee supports maintaining the integrity of section 2533a of title 10, United States Code, commonly referred to as the `Berry Amendment,’ which requires 100% U.S. content for certain products sourced for the Armed Forces. The committee is concerned with protecting the supply chain and domestic production base for components and weapon systems that are vital to the Armed Forces. In addition, the practice of sourcing certain products and materials from foreign entities in violation of the Berry Amendment may harm the domestic industrial base, as well as result in U.S. job losses. Therefore, elsewhere in this Act, the committee includes a provision that would require the Inspector General of the Department of Defense to periodically review the Department’s compliance with established restrictions.

Congressional Research Service, Valerie Bailey Grasso, Specialist in Defense Acquisition, February 24, 2014, https://fas.org/sgp/crs/natsec/RL31236.pdf

Relevant to Galactic Bioware is the US DOD’s Harnessing Emerging Research Opportunities to Empower Soldiers (HEROES) program which is strengthening each year.

The budget request contained $115.2 million in PE 62143A for Soldier Lethality Technology. The committee is aware of the work being done by the U.S. Army’s Combat Capabilities Development Command (CCDC) Soldier Center in improving the protection, survivability, mobility, and combat effectiveness of the Army. The committee is also aware that the Harnessing Emerging Research Opportunities to Empower Soldiers (HEROES) program is an ongoing joint research and development initiative involving both academia and industry that accelerates research and innovation through integration of intellectual assets and research facilities. The committee believes programs like HEROES provide benefit to research in areas of advanced ballistic polymers for body armor, fibers to make uniforms more fire resistant, and lightweight structures for advanced shelters that provide tangible benefits to the warfighter. To ensure the Army remains at the cutting edge of technology in these critical areas, the committee recommends an increase of $5.0 million in PE 62143A for the HEROES program.

NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2020, Report of the Committee on Armed Services, https://www.govinfo.gov/content/pkg/CRPT-116hrpt120/html/CRPT-116hrpt120.htm

Perhaps the closest Australian equivalent is the Land Combat, Amphibious Warfare and Special Operations stream of Defence’s innovation priorities. A focus on special operations capabilities including enhanced human performance.

Land forces require the mobility, firepower, protection and situational awareness capabilities to deploy quickly, achieve their objectives and return home safely.

Defence is seeking innovative proposals for leading-edge equipment to bolster ADF land forces in these capability areas, including amphibious warfare. The Defence Innovation Hub is seeking innovative approaches to developing advanced protection systems for vehicles and individual soldiers that do not inhibit mobility, developing technology underpinned by automation, autonomy and autonomous systems to provide capability enhancements to the land force, enhancing the efficiency and effectiveness of combatants in hostile environments through the use of new and emerging technologies, and delivering improved signature management and disruption technologies.

Australian Defence Force’s Defence Innovation Hub

Australia’s approach through the Australian Government’s Commonwealth Procurement Rules (CPRs) is significantly less developed, less ambitious and may require attention given worsening regional geopolitical conditions.

The Commonwealth Procurement Rules provide an exemption for “procurement of goods and services by, or on behalf of, the Defence Intelligence Organisation, the Australian Signals Directorate, or the Australian Geospatial-Intelligence Organisation.” but do not mandate an explicit preference for domestic supply where that supply exists or could exist.

The Australian Defence Force is undergoing a review intended to strengthen how defence does business with Australian industry but sets out no specific objectives. The 2016 White Paper outlined a strategy for resetting the Defence-industry partnership through the Centre for Defence Industry Capability (CDIC). The purpose of the CDIC is to provide strategic leadership for the sector, and to help build the capability and capacity of Australian industry to support the ADF.

The CDIC will be funded at approximately $23 million per year, which will be redirected from existing Defence industry programs funding. The CDIC is designed to help transform the Defence and industry relationship, and to fund new industry development, critical skilling and export programs, as well as facilitate access to Defence’s new innovation programs for small to medium enterprises. In consultation with Government, the CDIC will drive the strategic vision for the defence industry sector, building on the capability needs identified in the Integrated Investment Program. The CDIC will focus on delivering initiatives within three core activities—industry development, facilitating innovation, and business competitiveness and exports.

https://www.defence.gov.au/whitepaper/Docs/2016-Defence-Industry-Policy-Statement.pdf

The “Final Report” handed down by the CDIC in 2020 does not quantify any goals for domestic procurement percentages or minimum dollar spend in the domestic sources. The 2020 Defence Strategic Update and 2020 Force Structure Plan also does not quantify any Australian procurement goals or objectives. Throughout 2020, the Minister for Defence Industry engaged with the Australian Defence industry and identified a number of opportunities to improve Defence engagement with [Australian] industry and to build a more resilient Defence industrial base, but only at a procedural level.

A key opportunity identified is that it may be timely for the Department of Defence (Defence) to conduct a review of the Australian Standard for Defence Contracting (ASDEFCON) suite of tendering and contracting templates and relevant procurement processes and practices to support these objectives. 

https://www1.defence.gov.au/business-industry/procurement/contracting-templates/asdefcon-suite#ASDEFCON%20and%20Defence%20Procurement%20Review

The articles go on to say “Some of the opportunities for Defence procurement contracting processes and practices identified by the survey responses include:

  • simplifying and streamlining the ASDEFCON contracting templates;
  • removing complexity and onerous flow down obligations that lead to additional cost and risk to the suppliers;
  • developing subcontracting templates for industry to use;
  • expanding Defence commercial acumen within its procurement practices;
  • mandating Defence payment terms through the supply chain and considering partial payments of milestones to facilitate cash flow to industry, including small to medium enterprises (SMEs); and
  • relaxing some barriers to industry’s (particularly SMEs) participation in Defence’s supply chain.”

Much more could be done to stimulate and sustain a robust domestic defence industry in Australia and there seems to be political ambitions to do so, but it has to start with public quantified goals for domestic supply to incentivise talent to start and work for Australian defence companies. Current (public) goals for the domestication of defence supply are unquantified and not timelined. Australia does not have the demand or budget to be self-reliant across the military and intelligence capability spectrum, but in certain spots, could benefit from publicising the intention (subject to availability, quality and performance of course) to transition specific spending from foreign suppliers to domestic ones. This could enable crowding-in and a right-sizing of private investment that is matched to the potential transitioned spending. Done well and in focused “bite size” waves, the Australian economy generally will benefit as will the security outcomes in an increasingly uncertain future.