What ASIC told me about Korda Mentha …

First email

Chairman
Australian Securities and Investments Commission
GPO Box 9827
Sydney NSW 2001 Liquidatorregistration@ASIC.gov.au
Feedback@ASIC.gov.au

Dear Sir,

Why is KordaMentha, liquidator of Gunns Ltd, playing a pivotal role in the Tasmanian State election timing and announcement? Tasmanian Parliament is being recalled to assist KordaMentha misrepresent the facts in an asset sale which should have been completed by now. Why is an ASIC licensed liquidator working toward political outcomes and becoming involved in corruption?

Please see the attached media clipping from The Mercury and the ABC report here: http://www.abc.net.au/news/2014-01-15/premier-keeps-door-open-on-recall-of-parliament-to-back-pulp-mi/5201498?pfm=ms . All Tasmanian newspapers reported this news and the recall of Parliament on Wednesday 15 January 2014.

The timing of the liquidator’s media statement is suspicious in itself.

However, it has not been reported in the Tasmanian media that there were no buyers for the standalone sale of Gunns’ MIS scheme assets. A marketing campaign was undertaken by PPB Advisory, liquidator of Gunns Plantations, to canvass a diverse range of potential interested parties, advertising both locally in Australia and overseas. Over 70 interested parties were identified. These parties were provided with an interested party pack. Eight interested parties proceeded to stage one and completed a due diligence process. Each interested party was provided with an information memorandum for the Scheme Assets and access to supplementary data in the online secure data room. Four indicative non-binding offers were received from interested parties by due date of Monday 11 November 2013, although one party withdrew from the process shortly thereafter. The three remaining interested parties conducted further and more detailed due diligence and were invited to meet with and interview management and conduct site visits to view the Scheme Assets. Final offers for Scheme Assets were due on 9 December 2013. All remaining interested parties withdrew from the Standalone Sale Process and accordingly, there was no final offers received.

Has KordaMentha asked the State Government for special treatment such as retrospective legislation to guarantee a prospective buyer of the former Gunns pulp mill project a way around Tasmanian laws and community opposition? Or is KordaMentha doing the current State Government a favour in allowing it to appear as if there is a question of ‘valid permits’ that needs urgent resolution thereby providing the Premier with a trigger to recall Parliament and dissolve the coalition with the Greens in order to make good with certain groups of voters immediately prior to an election being called? That is, this Parliament is not supposed to sit again. KordaMentha has somehow managed to get involved in interfering with the democratic process.

This is an outrageous abuse of the role of liquidator. It is the sort of thing former CEO John Gay would have done.

Why is Mr Bryan Webster of KordaMentha making political decisions and statements instead of focusing on working in the interests of creditors? Please see this KordaMentha press release for another example of this conduct: http://www.kordamentha.com/news/gunns-woodchip-mill-re-opened

“Bryan hopes that this will also help to alleviate the loss of the state’s forestry skills.

“There’s not a lot of money being made out of this but what I’m worried about is, if I shut down the whole of Gunns from a woodchipping perspective, there’s going to be so much of a brain drain and a skill drain from Tasmania,” he said.”

Why is this man running a wound up corporation and why is he talking about local social issues and playing to the local media?

Is the State Government paying fees to KordaMentha or providing other incentives?

Please investigate the actions of KordaMentha and bring it to the attention of the Commissioner concerned. I hope ASIC stops this situation getting any worse by acting immediately and publicly and by using the full force of it’s powers.

ASIC’s Response

Second email

Dear Sir,

Further to my earlier email on 15/1/14, the Gunns Ltd receiver should not be interfering in the market and working with the State Government like a Departmental secretary or political staffer.

The Examiner newspaper yesterday, Thursday 16 January 2014, published this:

“The Examiner understands KordaMentha, receiver for Gunns assets, including the pulp mill, had pushed the state government to deal with the legal threat to improve the permit’s chances of being sold.

A KordaMentha spokesman yesterday said the potential legal threat was “one of many issues surrounding the Gunns assets and sale process”.

“It has been debated publicly and all potential buyers know about it,” the spokesman said.

“Legislation has always been a possible way to deal with the potential threat.

“The receivers have been briefing the government and the opposition about developments in the receivership for more than a year.

“It was discussed as part of the regular briefings and feedback.”

http://www.examiner.com.au/story/2026531/warning-from-pulp-mill-protesters/?cs=95

The separation of powers in our democratic country is not a “potential threat” as claimed by KordaMentha. Why has the liquidator of former Gunns Ltd over-stepped the mark like this, and why has it been necessary to for it to become enmeshed with local politicians? There weren’t lots of job losses or shared critical infrastructure or services to discuss – why the “regular briefings and feedback” by the liquidator? Is the liquidator allowed to act this way, colluding with pro Gunns, anti Green party politicians as if Tasmania is a lawless, dictatorship without the possibility of judicial review?

I am stunned by this.

I am also wondering why ASIC is not in there doing the work directly or closely supervising it and collecting potential evidence of John Gay’s criminal conduct or ascertaining if there’s a culture of corruption or white collar criminality within the business. If the leadership has been corrupt, then it is not ridiculous to consider that the whole barrel might be affected. There have been such indications since Edmund Rouse tried to bribe a politician to keep Robin Gray in power since the 1980s. In 1989, Royal commissioner William Carter released his report into the attempted bribery of Labor MP Jim Cox by Rouse. The royal commission was established to determine who was involved in the bribery attempt other than Rouse and his go-between, Tony Aloi. Carter’s report confirmed that Robin Gray, the then Liberal premier, had acted “deceitfully and dishonestly” and had been “misleading and deceptively evasive”.

The last time the Tasmanian Parliament was recalled was when Robin Gray was Premier and he wanted a pulp mill approved. That would be the same Robin Gray who has been a long-time company director of Gunns Ltd. Or does ASIC think Mr Webster of KordaMentha came up with the current strategy on his own?

KordaMentha employess have gone native and possibly without even realising it. Perhaps ASIC needs safeguards for liquidators in the same way the police do when they have officers working undercover in organised crime networks.

Mr Webster of KordaMentha has asked the Tasmanian Palmer United Party leadership to change its policy of support for a Hampshire located pulp mill or to at least delay that policy announcement to the public in exchange for favourable public statements. This was not agreed by Palmer United …

Note: No final offers have been received.

• Meanwhile, compare this liquidator’s approach to the way Gunns Ltd has been looked after … Jan Cameron doesn’t have a conviction either. Interesting timing too … :

http://www.themercury.com.au/news/tasmania/jan-cameron-faces-100m-claim-over-retail-adventures-collapse/story-fnj4f7k1-1226853033438

*The anonymous writer Reginald is known to the Editor