Gordon-Watson: "I've had some close shaves with bad payers~.maybe I got away with it for too long"

Risbusiness

Twelve months ago Charlie Gordon-Watson was staring into a financial blackhole. The celebrated bloodstock agent,who boasts a 'who's who' of clients and

whose big-race buys include Derby winner Kris Kinand this year's French 2,000 Guineas winner SilverFrost, had been stitched up by a con man and facedthe very real task of disentangling himself from amassive financial hit.

At Tattersalls' 2007 December Sale serialfantasist Michael Baker - now serving a prisonsentence for fraud - instructed Gordon- Watson tobuy four in-foal mares, namely Sweet Stream whocost 1,100,000 guineas, Silverskaya'750,000gns, ahalf share in Leto for 450,000gns, and Mora Bai,who made 380,000gns.

The sales company paid the vendors, but whenBaker failed to reimburse Tattersalls, it wasGordon-Watson who was left holding theheadcollars and facing a series of exhaustingchallenges to make good the damage,

As the victim of a serious fraud, Charlie Gordon-Watson was left facing huge personal liabilitiesand dreading every telephone call he receivedWords:Carl Evans

How did it come to that?In September last year Michael Baker was given athree-year sentence for fraud involving the

48 THOROUGHBRED OWNER & BREEDER INC PACEMAKER

;,urchase ofbloodstock through both Gordon-Watson and trainer Henry Cecil.

Judge David Griffith- [ones accepted Baker, 28, abankrupt former pub landlord, suffered from a?ersonality disorder, but said: "These werecalculated frauds ... involving significant degrees ofsubterfuge. "

Baker asked for a further three offences -involving a £13 million lease on a Londonproperty, a £49m Cayman Islands-based yacht andsixUS-based horses worth £13.5m - to be takeninto consideration.

"That he was able to commit fraud involvingmany millions, not only in racing but also banksand property companies, shows how plausible andclever Baker was," says Gordon-Watson.

"He claimed he was a private equity investor, buthis knowledge of racing, pedigrees and people inthe game was phenomenal. I got a number ofemails from him, saying he was coming to the salesetc, but he always had an excuse and didn't turnup. I never met him.

"One evening at the December Sales I spoke tohim on the phone and suggested a fillythat wascoming into the ring would suit him to stay intraining. He asked: 'Who would you recommend totrain hert"

At this point, Gordon-Watson suggested a leadingNewmarket trainer, with whom Baker then talked atlength about a series of races that would suit hispotential purchase. "He was very convincing andeven when Tattersalls first contacted me with theirconcerns I was relaxed, " Gordon-Watson recalls.That was because he knew Baker was also dealingwith a firm of estate agents over a property andbecause he was also in talkswith some top USconsignors about buying bloodstock from arenowned breeder. It was when that deal collapsedthat Gordon-Watson became worried.

"Throughout this saga I was given support by anumber of key industry players - that sense ofcamaraderie was really appreciated," he says. "I willbe more rigorous in future, set up an escrowaccount with Weatherbys Bank and ask a new clientto deposit money."

Lessons learnedThe experience would have soured even thegreatest optimist, yet Gordon-Watson has foundrenewed energy for the game and seems happy toaccept lessons learned from the Baker debacle.

He says: "I'm wary now and more realistic. P,'ehad some close shaveswith bad payers and acceptedthem as part of the business, but this one went toofur.Maybe I got awaywith it for too long."

- At the time, Gordon-Watson admits: "Life was~ awful. I would get up expecting bad news from~ every direction. Whenever my mobile rang and sard~ P Ryan (Paul Ryan, Tattersalls' financial director I~ dreaded it. One moment I saw light in the tunne~ the next it was gone. We had someone in Canada

"Life was awful;I would get upexpecting badnews anddreading mymobile ringing"

CHARLIE GORDON-WATSONSURVIVING A LIVING NIG1-ITLVtARE

who was going to take three of the mares, but afterthat had dragged on for months it fell through -that was dreadfuL In the meantime the mares werefoaling, but should we cover them?

"It was a mess. It was hell, a living nightmare. Ittakes your eye off the ball and affects your otherwork. The only consolation was that interest rateswere low, which eased my burden."

Yet Baker's trail of deceit gained a perverse sheenin December last year. Sweet Stream's Monsun fillyfoal, carried when Gordon-Watson bought her forthe fraudster, fetched 440,000gns and topped theDecember Sale's weanling section. That paid offanother chunk of the debt and raises hopes of anironic profit one day - after all, Sweet Stream, whois only nine, has had a Galileo foal this year, whileLeto, covered by Dansili, and her weanling by thatstallion are heading for the December Sale.

"If Baker had been genuine he would be in avery good position now - Sweet Stream's fillytopped the December Foal Sale, and at Deauville in

. August the filly carried by Mora Bai sold for£200,000," says Gordon-Watson. "None of themares have paid for themselves but they are goingthe right way and are young enough to return aprofit."

Escape to the countryEarlier this year Gordon-Watson left his long-timeLondon base for a home and office in the groundsof Lord and Lady Lloyd-Webber's WatershipDown Stud. It is a place of serene tranquillity in thecountryside near Newbury and has helped its newtenant rediscover the drive to stimulate business.

He says: "Maybe I'm typecast as a yearling buyer,yet my results with mares are as good if not better.Thanks to mares bought for Watership Down Stud(including Darara, dam ofDar Re Mi) andBreeding Capital (such as Manduro's sisterMadura, who was bought for 170,000gns and wassold on for 7l0,000gns) I've had some goodresults in recent years - perhaps I've been lucky."

"But if you see a lot of young horses and havespent many years at the sales, you build a picture oftheir conformation faults, traits and advantages,

. and get an idea about how each horse should lookfrom different families. If a horse is incorrect insome way, but you can remember the mare's bestprogeny were like that, you are at an advantage. "

Of course, not all purchases, be they yearlings ormares, budget friendly or sky-high expensive, areguaranteed to be successful.

Take the yearling filly by Sadler's Wells out ofBrigid (and therefore a sister to Group 1 winnerlisten and to Sequoyah, the dam ofHenrythenavigator) that Gordon- Watson boughton behalf of Craig Bennett for a world-recordL500,OOOgns at the October Sale in 2007.

The filly, later named Liffey Dancer, never set:001 on a racecourse and, while she could recoup

~Turn to page 50

THOROUGHBRED OWNER & BREEDER INC PACEMAKER 49

CHARLlE GORDON-WATSON

~From page 49her cost in the breeding sheds and become alegendary foundation mare for Bennetr's MerryFox Stud, she has yet to get off the mark.

Gordon-Watson says: "Craig spent a lot ofmoney but he's very happy and has never moanedor complained. He's had some good fortune andsome bad.

"I also bought him Annabelle's Charm (byIndian Ridge) and Alsace Lorraine (Giant'sCauseway) and they have won three apiece.Annabelle's Charm is a Listed winner and bothhave achieved high Timeform ratings.

Broodmares: anagent's guide tobuying at auctionGordon-Watson admits that he is fortunate tobuy for some wealthy dients and can thereforeindulge in trying to acquire the best stock, butthere is still plenty to look out for when partingwith your cash at the sales

ConformationThis is crucial.Thev've out to have. ~good heart room andbe roomy enough tocarry a foal. Shortcannon bones, a goodpastern angle and nottoo slack, a goodsecond thigh - theseare standardrequirements, becausecorrect mares tend toproduce good foals.

PedigreeIdeally the first,second and third damare Group 1performers, but youdefinitely want thatlevel of ability doseup. It's not acoincidence. The PrixVermeille ishistorically a verygood race forbroodmares - Dararawon it, as did SweetStream, whose looks

and racecourseachievementsovercame herpedigree. "

SizeI prefer smaller mares;from experience theyseem to producebetter foals. Darara(the dam of Dar ReMi) looked like aDartmoor pony whenwe bought her. I'mnot a fan of big, longrangy mares - thebigger a horse themore there is to gowrong.

SoundnessThis and race recordtend to go hand inhand.

Broodmare sireThis is also veryimportant, as has beenshown time and againby sires such as

THOROUGHBRED OWNER & BREEDER INC PACEMAKER 50

"The world-record fillynever developed. She wasa fantastic yearling and had everything in the rightplace, but didn't grow.

"Craig's taken the long-term view that youcannot take the blood away. I would rather buy tenfor the same money, but some clients prefer to gofor one outstanding horse. He wanted the bloodfor the long term and I could see his point.

"It was huge pressure because you're on a hidingto nothing. It's great to have the glory of buyingthe top lot, but it's soon over. I'd do it again butit's an interesting experience. You are puttingyourself in a very tight corner.".

Oar Re Mi (pink silks): her dam. Darara, was bought by Charlie Gordon-Watson

Habitat, ShirleyHeights, Sadler's Wellsand Darshaan. Thereare plenty more.

AgeThere is a cut-offpoint - if you haven'tsold them by the timethey are 13 you havethem for life. Itdepends on what theyhave produced. Whena mare looks old theirhealth becomes aconcern.

CoverA mare has only to be

in foal to that horseonce, so if you like themare enough but shehas a poor cover itwouldn't put me off.Often it makes thembetter value.

I'm a great believerthat the female genesare 70% of the foal. Ifyou look at the AgaKhan's stud book andsee good horses byDesert Style andZarnindar - who arenot top-draw stallions- it shows howimportant the femalegenes are.

People with reallygood mares tend toover-cover them andyou have to admireBallymacoll Stud,which has producedwonderful horseswithout going crazyon the stallion.

Maiden maresYou have to waitlonger to get a returnon your investment,but if a young marehas all the otherattributes I wouldcertainly not be put offbuying her.