Tasmanian Times

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The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. No price is too high for the privilege of owning yourself. ~ Friedrich Nietzsche

Economy

The Heart of Gunns’ collapse (2)

• Trevor Burdon in Comments: I have feedback on file access from his Honour’s Associate, to paraphrase: – My affidavit (including John Hawkins’ evidence) is available to be viewed from the Principal Registry of the Supreme Court of Victoria. – The basis for the examination summons, the Liquidators affidavit, remains confidential without an order from the Court. – Access to the court book is a matter to be negotiated with the plaintiffs’ solicitors. – The record of the examination becomes part of the “written record” of the examination under the Corporations Act 2001 (Cth), it may be accessed on payment of the prescribed fee (s 597(14A)(b)).

Public Examination of Gunns Accounts and their Auditors KPMG

Today in the Supreme Court of Victoria, JWS and Allens, counsel and briefing solicitors (for PPB and KPMG respectively) gathered for the examination of Gunns (GNS) accounts. 10 am, Wednesday the 10th February has been set aside for a follow-on day at 436 Lonsdale St, Melbourne. Contrary to the PPB advice that this hearing is confidential, it is a public examination and anyone may attend.

His Honour AsJ Gardiner, directed that I was ineligible to appear. His associate later advised my affidavit had been placed on the record, and I handed my affidavit and evidence to the JWS instructing partner. It comprised of my observation of discrepancies in PPB’s Administrators Report and John Hawkins’ ‘Underbelly’ assertions of the misuse of federal funds to bail out GNS while in default on its ‘take-or-pay’ contracts with Forestry Tasmania. It included the Forestry advice to its Minister that it considered GNS insolvent months before KPMG signed off on the 2011 Annual Report. I have heard no indication that the import of John’s research has been digested.

His Honour has directed Leigh Franklin (Partner, KPMG), who has been on the stand all day, to answer all questions even if incriminating. However, he may preface his answers with ‘Privilege’ when he wishes. Almost without exception he has done so, even when confirming KPMG Manual standard processes.

A forensic inquiry into KPMG working papers, KPMG preparatory reviews and the Gunns Annual and Half-Year Reports has commenced. Mr Franklin joined the relevant audit team late 2008. He assumed the Lead Audit role early 2009, and was then directing half and full year reviews until Gunns entered administration on 25th September 2012.

Applicable accounting standards have been confirmed, and sources of expert advice identified whether they be internal to GNS, internal to KPMG, or third-party, external advisers. The investigation is confirming the observance of those standards, and review of advice with a proper ‘professional scepticism’. That entails ensuring appropriate financial controls were in place, and that substantive Tests Of Detail (TOD) were conducted where material issues were identified. The submission through to EOFY 2009 has been heard, and cracks are evident to me – at least.

The capacity of Gunns to potentially borrow up to $1.5B and then $2B, cast a strong light on:

1. Gunns existing liabilities, wrt,
– the difficulty of retaining and finding new sources of funding;

2. the Gunns Finance loan book to investors, wrt,
– the Gunns Finance Recovery account holding $40.8M of loans in 2009 that had not been serviced for over a year; and two cohorts of investors trading as Jameter(?) and Monela(?) responsible for much of that;

3. the security value of biological assets for GNS and defaulting MIS growers,
– the reducing harvest yield per Product Disclosure Statements forecast in years 2000 through 2006; and use of a favourable discount rate internally – outside the range used by KPMG; and;

4. the capitalisation policy of Pulp Mill Opportunity (PMO) expenses, wrt,
– a sustained reliance on believing the PMO to be credible, throughout delayed finance solutions and environmental regulatory approvals.

Internally KPMG assessed Gunns as a high-risk client, and questioned whether they should retain them. This risk received KPMG Divisional and perhaps Australian CEO scrutiny. The 2009 KPMG audit engagement was quoted at $533k.

Wednesday, 10/2/16 is shaping up to be an extraordinarily interesting day. So far PPB counsel have drawn upon 3 volumes of evidence. There are twelve in total. KPMG counsel are present to protect KPMG interests and have objected to several questions. All have been allowed after clarification.

The legal costs will be eye-watering. As a 2000-01 grower I asked a PPB solicitor how they will recover their costs. “It will come from the assets held by the Liquidators though there’s not much left now”.

‘Privilege’ Don’t I know it! (The liquidators assets are the proceeds from the fire sale of disclaimed growers’ trees. In my case $1/tonne has been realised, while equivalent woodlots are achieving $15-$25/tonne on the open market.)

Footnote: Unless ASIC or some maverick legal firm is prepared to take on KPMG, we may only see the Court go through the preliminary motions. How much better if this examination of cause had been conducted before the dispossession of grower property?

Trevor Burdon
15/2/2016

-/ctd
10/2/2016

The Examination returned to AsJ Gardiner’s home court, Court 6, 436 Lonsdale St, Melbourne. A follow-on day has been set for Mon 22nd February. Contrary to the PPB advice that this hearing is confidential, it is a public examination and anyone may attend. Given that this examination goes to the heart of Gunns’ collapse it is somewhat surprising that there is no media or corporate shareholder or superfund presence (eg UniSuper). One would hope they take some interest in the findings of the examination. Without a Court extension that may be as late as August 2016.

PPB are not in attendance, however JWS representing them have senior counsel and two briefing solicitors at the bar, and a partner and two further solicitors in the courtroom. The examination has progressed to the KPMG pre-emptive full year review for 2009/10. At this pace, another two days is likely.

It is a legal feast. In court, senior counsel are ~$10,000/ day and briefing solicitors ~$5,000/day. In preparation, briefing costs are ¾ of that rate for senior counsel for their own work, and 5/6 for solicitors from their own firm. If from outside their own firm 2/3 is the guideline, but an individual’s proper fee may be approved.

Assume KPMG’s costs to Allens are their own. Allowing for four court days, 5 days initial and 1 days’ subsequent for briefing per court day (counsel and briefing solicitors) and 6hr in court per day for the entourage, the Johnson Winter & Slattery legal costs are ~$230,000.

Senior Counsel in court $40,000 $10,000/ court day
Senior Counsel briefing $60,000 $7,500/day 5 then 1 days/court day
Briefing Solicitors (2) in court $40,000 $5,000/ court day
Briefing Solicitors (2) briefing $46,200 $6,600/day 5 then 1 days/court day
JSW Partner in courtroom $28,800 $1200/hr 6hr court day
JSW Solicitors (2) in courtroom $14,400 $600/hr 6hr court day

This bill will be paid from the proceeds from the sale of growers’ trees. I am reminded, painfully, of my early signature subtext “Trevor Burdon represents the interests of growers for whom $5000 was a 20 year investment, not a daily fee.”

Further points relevant to the KPMG acceptance of Gunns accounts from today included:

5. Gunns Finance Recovery account, wrt,
– no audit assessment of the security value of defaulting growers trees;

6. Gunns Finance loans issued, wrt,
– no audit check evidence of Gunns grower investor credit-worthiness;

7. Gunns Finance write-offs, wrt,
– no audit check evidence of write-off termination values;

8. Pulp Mill Opportunity (PMO) capitalisation, wrt,
– the absence of detailed evidence of the categorisation of PMO only activities in the KPMG working papers, including $4.48M attributed to corporate costs by Messrs. Gay and Chapman;

9. PMO Funding, wrt,
– the absence of a half year 2009/10 audit review, of the status of $125M to be secured by Nordia;

10. Gunns land valuation where encumbered by standing timber, wrt,
– Auspine and GMO sale transactions,
– land that had no market,
– land remediation costs where planted, and,
– audit scrutiny of valuations provided to Gunns management by ForPac and Esk Property (the latter unknown to the KPMG partner);

11. Auspine Goodwill and Impairment, Sales Forecast, wrt,
– Auspine trademarks recorded variously as $19.8M and $0,
– carrying value and impairment,
– a $20M tree valuation and a forecast of $300M sales for unprocessed trees over the next 5 years. KPMG did not answer “You accept this is not credible” deferring to a need to refer to other reports;

12. Gunns Group valuation of roads, wrt,
– separate entry in the accounts but no separation in the third-party valuations,
– no audit view of whose asset where roads were developed on Crown land (I provided JSW with notes showing the GNS Annual Report 2011 devaluation of Crown roads from 142M to 19M),
– no working paper audit view on road impairments;

13. Scheme 2008 deemed an Onerous Contract.
– due to rapidly increasing maintenance actual, but no reforecasting of the remaining schemes with the current actuals.

‘Privilege’ This summary of issue points is produced from my personal courtroom notes and involvement in the 2001-02 clearwood schemes. I am not responsible for any interpretation by others. The court transcript is confidential until the close of the examination. The KPMG witness may not discuss the proceeding with any party.

Footnote: Gunns desire to report favourably year-on-year is a given. That KPMG did not request a full re-forecast of scheme viability in FY 09/10 is remarkable. It remains to be heard whether it did so in 10/11, especially when Willmott Forests collapsed early that year. Furthermore, it is especially egregious to growers to learn that they will pay for this examination, while from the $300M sale, the Receivers have made off with an indicative $50M for the unsold, unbuilt Pulp Mill, many millions more for nurseries supplying no or minimal seedlings, and an apportionment for land rental which Forico is most certainly not paying itself where it now owns both the land and the MIS trees.

-ctd
29/2/2016 – Final Day S CI 2015 3684

The Examination continued today before Associate Justice Gardiner at the Court 2, 223 William St. There will be no follow-on day. The public examination (contrary to PPB advice that it was confidential) has been restricted to records and activities by the KPMG auditors through to EOFY 2009, and not the date of Gunns entering administration, 25th September 2012.

QC Mark Hoffman, counsel for the Liquidators PPB, renewed his non-stop confirmation of the physical record from KPMG audit reviews and workpapers. David Lumley, former Engagement Partner, KPMG, was in the box all day. The questions put to him were most usually of the construction “You’d agree wouldn’t you?” to confirm a signature, dollar amount or process step. The response was typically one of “Privilege, yes”, “Privilege, no” or “Privilege, I don’t recall”. Very few searching questions were posed and the whole examination not particularly illuminating beyond what was heard on previous days. KPMG challenged no questioning all day.

Although Mr Lumley brought billable expertise on loans and borrowing to the audits, Mr Hoffmann did not delve any more deeply into the credibility of Gunns’ assertions that it could secure further and sufficient funding.

More detail would only be forthcoming in a Statement of Claim proceeding. What is pertinent, however, is that material audit steps signed-off by Leigh Franklin, KPMG, were most often also signed-off by his senior colleague David Lumley.

Specifically, the following issues were reiterated:

2., 5. Adding, that there is no record of default interest or proper provisioning of default on the Gunns’ Finance Loans to Moneela or Jameter.

3. Adding, that internal KPMG correspondence called out that the discount rate of 9% was at very low end of the 9.0 – 10.5 prescribed range. Adding, that internally Gunns were using 7.5% where it might have been beneficial to do so. Adding, that standing timber of age 0-3years was inconsistently valued at cost (as per Gunns policy) or harvest Net Present Value where it might have been beneficial to do so.

13. Adding more detail showing that by 2009, the 2004 scheme maintenance actuals were ~$600 pa/ha yet forecast costs were left unchanged at $24.20 pa/ha. Adding that scheme returns were mostly left as cumulative totals and not subjected to closer scrutiny by calculating NPVs across the schemes.

10., 11. Adding, that Auspine valuations were based on revenue from all the holdings despite a sale to GMO. No reference to buyback provisions could be found. Adding, seemingly, spurious references to a perpetuity factors of 11.1 cited without explanation. Again, the Auspine sales revenue of ~$300M (now also found referenced as $350M) against trees with a $20.6M carrying value prompted a “You’d agree this is impossible?” question and an “I don’t know, I am not sufficiently familiar with the model” response from Mr Lumley.

10., 12. Adding, more detail using the Esk Property valuation of the NSW property ‘Quamby’, that its remediated valuations did not lead to an estate-wide accounting for remediation costs. Adding, that this valuation’s lack of a roads asset despite the use of that category in the consolidated accounts. Adding, that the Forestry Practices Code required roads suitable for heavy vehicles. Adding, that no instructions for road assessments were required of Esk for roads whether crown, freehold, or leasehold. “Did you ever sight a road valuation?” … “Privilege. I don’t recall”

His honour closed the proceeding, stating his order would include usual sunset clauses orders (10 years I believe), that the transcript was to be confirmed and signed by witnesses, that those witnesses should maintain confidentiality until the transcript was released and that a statement of claim could then follow if there was a party so interested.

A brief discussion on the filing of the court books ensued, with his Honour stating that the Court Registry was pressed for physical space. Counsel came to an agreement to each hold a complete copy including documents handed up in a new Supplementary volume.

‘Privilege’ This summary of issue points is produced from my personal courtroom notes and involvement in the 2001-02 clearwood schemes. I am not responsible for any interpretation by others. The court transcript is confidential until the close of the examination. The KPMG witness may not discuss the proceeding with any party.

Footnote:

The examination has produced many volumes of paperwork retrieved from KPMG via their legal department. I have made enquiries of JSW, and his Honour’s Associate, as to whether the court book as well as the transcript will be available to the public. The transcript will be available for purchase, but will make very obtuse reading without those volumes for reference. I believe this will answer the question of how ‘public’ the examination of a former ASX100 company can ever really be.

The JSW instructing Partner has confirmed that they did consider the relevance of my affidavit. At this stage the presumption of Gunns Plantation falling insolvent as Gunns Limited did stands, despite it not being cross-collateralised and holding a current asset of $84M (a Gunns Limited liability) and a $4M line of separately secured working capital for this very eventuality. Was Gunns Plantations in fact one of Gunns Limited’s largest creditors? The Forestry Tasmania assertion of Gunns early insolvency and apparent misappropriation of Federal funds raised by John Hawkins has not been examined. JSW will respond to me shortly, and I will post that feedback.

Without some credible basis for a recovery of legal costs in a claim, this is likely to be the end of the road. Sale proceeds from growers’ trees are all but exhausted on legal costs without any obvious benefit of this exercise flowing to them. John Hawkins may have already opined that his revelations demand a Royal Commission.

*Trevor Burdon is a business and IT consultant based in Melbourne. A Tasmanian interested in sustainable inputs to Tasmanian forestry industry, he invested in early Gunns MIS clear wood schemes. Uniquely he has appeared as a individual contradictor in the Gunns’ Liquidation proceedings, and was an in-camera witness to the Senate Inquiry into MIS schemes.

EARLIER on Tasmanian Times …

The Heart of Gunns’ collapse (1)

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19 Comments

19 Comments

  1. Trevor Burdon

    March 13, 2016 at 12:42 am

    16. I share your frustration, and have always found it as interesting to reflect on the phenomenon of followership as opposed to leadership. Cascading **** is right. There is very little left for the investors that poured $1,800,000,000 into Gunns MIS.

  2. Trevor Burdon

    March 13, 2016 at 12:25 am

    /ctd
    The date GPL first investigated the separate bank guarantee would be material, because it would tell us when GPL management first considered the $88M of current assets (GNS liability to GPL) could not be called on.

    Witness, David Lumley (KPMG Lead Engagement Partner), would most probably have met all the Gunns Executive and Directors. Can you imagine the scene, Gunns hosting corporate events in Launceston and shouting KPMG canapes and drinks. Everyone would’ve been feeling so self-important. If KPMG determined Gunns to be high risk in 0809, what on earth were they doing in 1011 maintaining the charade. As we heard in the examination, Mr Lumley specifically booked time for advice on Gunns loans. Remarkably, the examination did not investigate the ongoing funding issue with him after calling it out on the first day.

    JSW have not come back to me as initially offered. They daren’t offend their secretive client PPB whilst there’s a whiff of legal work on the table. Their Report foreshadowed a need for examinations into directors duties and RE duties.

    Three and one half years on, PPB has made no announcements on director and management culpability.

  3. Trevor Burdon

    March 13, 2016 at 12:23 am

    15./ Mike, $2.3B was the final estimate to establish the Pulp Mill. The S439A Administrators Report*, PPB, 25/2/13 cites total external creditors claims as $780M made up of $445M to Lenders $190M to other secured creditors, $10M to employees and $135M to trade and other creditors.

    * See Report https://db.tt/nDuIMMlw, Appendices https://db.tt/aB2Lgee5

    Intercompany loans are quoted at $2,242M without any elaboration. It would be interesting to understand how such a large sum could possibly be made up.

    In this same report is further detail of the Gunns Plantations bank guarantees. They totalled $7.5M ($4.5M GPL RE and $3M Great Southern), and the Receivers claimed them as a security of theirs. $2.5M was finally negotiated with the Liquidators, so that they may commence their ‘undertaker’ role for a year or two, funded … but no more. Potential REs were scared off by Receiver calls to hold them responsible for all existing GPL debts including claims for land rent, which were already offset many, many times over by swept funds.

  4. Simon Warriner

    March 10, 2016 at 9:19 pm

    The issues Mike Bolan raises are amply addressed if one considers the narcissistic nature of the industry of which Gunns was a major part. The outright denial of reality, the over the top attacking of those pointing out the reality, and the mob of adoring sycophants are typical of a narcissist in full flight. The cascading cluster fuck left behind is also typical, as anyone who has been subjected to the attentions of this most malignant distortion of humanity can attest to.

  5. Mike Bolan

    March 6, 2016 at 3:49 pm

    Gunns failure to attract further funding for the imagined pulp mill, would have been hampered by:

    * their total debts at the time (I think they were into ANZ for $2-3 bn dollars)
    * the likelihood that they could make a pulp mill profitable (they were amateur operators, pulp prices had been trending down for years, and overseas mills with better wood supply were closing)
    * availability of better investments.

    Consequently it will be interesting to discover (if we ever do) on what basis Gunns was proposing to proceed. They’d already booked their ‘investments’ in a mill as a future income source so they were upbeat, particularly as they denied any risks in the project.

    One might imagine that any ‘interested’ investor, of which we assured there were many, would have looked at the books, Gunns lack of expertise and the global commodities market for fibre, and run as fast as they could.Why did Gunns own finance people, and the ANZ folks, ignore those factors and keep talking the project up instead of sounding clarion alarms.

  6. Trevor Burdon

    March 4, 2016 at 9:00 pm

    I have feedback on file access from his Honour’s Associate, to paraphrase:

    – My affidavit (including John Hawkins’ evidence) is available to be viewed from the Principal Registry of the Supreme Court of Victoria.

    – The basis for the examination summons, the Liquidators affidavit, remains confidential without an order from the Court.

    – Access to the court book is a matter to be negotiated with the plaintiffs’ solicitors.

    – The record of the examination becomes part of the “written record” of the examination under the Corporations Act 2001 (Cth), it may be accessed on payment of the prescribed fee (s 597(14A)(b)).


    An online document available from Allens Arthur Robinson, “Public Examinations – Who can use, when and for what” 9 July 2003, elaborates on the law and its application.

    Eligible applicants include ASIC, a liquidator, an administrator, a person authorised in writing by ASIC with precedents set for privately appointed receivers and managers, trustees of a unit trust and a regulatory authority.

    As a large creditor To Gunns Limited, Gunns Plantations interests should be defended by their Liquidator, PPB Advisory; and the Crown’s interests by ASIC I would presume.

    I haven’t heard back from JWS, but will query them on how comprehensive and informative the written record (transcript) is likely to be, whether grower and Crown concerns are tabled (somewhere!), and what further legal action is likely.

  7. Karl Stevens

    March 2, 2016 at 4:20 pm

    Jack Lumber 11. Your comment is conflicted internally in my view. On the one hand it requests more info on Armillaria root rot, on the other it requests the thread should be kept to Gunns receivership.

    Sometimes I wish there were more technically-minded comments in the Tasmanian media. I’m sure an Evan Rolley or a Bob Gordon would not waste valuable electricity commenting on every tiny piece of minutiae about the alleged gross mismanagement of Tasmanian forestry.

  8. Trevor Burdon

    March 2, 2016 at 2:50 pm

    10./ Cruelling GPL, the first thing Receivers did was have the $4M line of working capital severely reduced.

  9. Jack Lumber

    March 2, 2016 at 1:50 pm

    re 10 … Karl what are you suggesting re root rot
    if there is a cover up or some coating or veneer laid over the topic .. raise it please

    Actually this thread is very important and informative so perhaps it should be kept to comments which are directly or indirectly related to Gunns receivership and the subsequent management of process by KM , PPB et al

  10. Karl Stevens

    March 2, 2016 at 1:08 pm

    Trevor Burdon 6. You’ve raised a very good point. Why are PPB the administrator of Gunns and also the liquidator of Gunns subsidiary GPL? (Gunns Plantations Limited)
    If GPL really was a separate entity then why did it go into administration at the same time as Gunns? If it’s not a separate entity then why does it have a separate liquidator?

    Apparently KordaMentha and PPB Advisory are almost always appointed as a ‘team’ when the ANZ Bank chooses to place a company into administration.
    The corporate administration ‘industry’ is allegedly almost completely unregulated.

    As administrator for GPL, PPB would automatically become the ‘responsible entity’ for GPL.

    I’ve discovered another issue that indicates tree plantations may have done massive damage to native forests in Tasmania by spreading a virulent pathogenic root fungi called Armillaria root rot. It kills mature native trees very quickly.

    I now think the total cost of the MIS ponzi schemes to Australia are bigger than the financial damage the schemes inflicted on everyday investors. Knowledge of the Armillaria root rot may have been covered-up.

    It looks like tree plantation ‘tulip mania’ is going to cost all of unfortunately.
    https://en.wikipedia.org/wiki/Tulip_mania

  11. Richard Kopf

    March 2, 2016 at 12:08 pm

    I had ringside seats to Gunns’ impending collapse as every night of the week,except Sundays, log trucks would depart at 3am from Triabunna headed of to sites on the other side of the Island to gather, so called, waste logs that had been clear felled and then shredded into wood chip at the Triabunna mill. One driver told me he was paid about taxi driver rates. He subsequently died of a heart attack. Gunns, a company desperate to survive. Many of its contractors didn’t survive either.

  12. William Boeder

    March 2, 2016 at 12:06 pm

    Continued/
    Over the years that I have paid close attention to the publications such as the Financial Review, The Melbourne Age Business Section, the ASX defaulters site, (this default site has been radically altered in favour of the offender) whereby nowadays there are no sudden death or sin-bin recommendations etc, all is rather sterile and toothless in today’s ASX being able to institute disciplines and to hand down compliance enforcements.
    1 of the regular names in the defaulter section in times of old was Macquarie Bank, another was KPMG.
    In former times an ASX boardroom member had an association with the former Gunns Ltd directors.

    Of important note is that the ASX has lost its disciplinary powers, (they not at any time having held a capacity to hand out penalties and having any legal authority of judgemental powers. though in those earlier times they had assumed such powers until finally new regulations adopted had brought a halt to such nil authority practices.

    One of the major defects occurring with listed companies and their regulatory disclosure practices, was the lack of ethics that existed among a great many listed companies, this is still a common theme that is even now of important concern.
    Where suspicion of this ever present casual approach toward the ethical conduct is still a continuing problem.
    Then there came the case of Korda Mentha seeking a High Court hearing in an attempt to qualify the burdensome costs that were inflicted upon companies such as Gunns Ltd with its assets located all over the place and held under names not descriptive of easily identifiable toward Gunns Ltd, yet were of course assets then added to the pool of the remaining assets that were to then in turn to have their administrative costs attached as were levied upon each of the remaining monies or assets left in limbo once Banking interests and securities liens had been satisfied.
    Then the remainder of assets and holdings, such as was the case with Gunns Ltd’s insolvency situation, however the Pulp Mill Approval was considered an asset, even though there were very few expressions of interest this has allowed the invoices their continual flow against what ever other assets may remain.
    In the case of Gunns Ltd insolvency which was announced back in September 2012 yet this matter is still ongoing from the administrators PPB Advisory, so invoices are also alive and breathing until such time as the entire Gunns Ltd farrago is ended.
    At some later point in time it should become a priority to see revealed the totality of costs that have been claimed by the respective insolvency experts, estate administrators and subsidiary experts in various other fields of expertise and on goes the motley that will ultimately see that little will remain for the non-secured creditors.
    to be continued/

  13. Henry Melville

    March 2, 2016 at 12:03 pm

    Intriguing about the relationship between PPB and Korda Mentha.

    They seem to me to be joined at the hip.

    A mate reckons they are basically standover merchants …

  14. Trevor Burdon

    March 2, 2016 at 11:54 am

    4./ I am surprised by the role allocations myself.

    PPB were the Administrators for parent Gunns Limited and became the Liquidators for Gunns Plantations. They also became the Responsible Entity for the Gunns Plantations Schemes, which placed them in some compromise. That is dealing at once with the recovery against Gunns Limited interest in plantations (~12% future harvest percentage) and grower investor interests (88% remainder). We know who won that one!

    Korda Mentha are the Receivers and took on the interim management of the Gunns Group. They’ve sought premiums and commissions from growers sales proceeds at every step.

    They’ve pulled reports from public references, they’ve threatened the future work and/or reputation of industry contractors, and they’ve supported the Liquidators and threatened security for costs from little ole me should I ever appeal anything. Most recently they’ve placed parties under duress on Forestry Practice Plans. KM demanded $1800/ha from 2000 and 2001 growers to sign-off FPPs that included full remediation and re-planting. This was specifically not a contractual obligation of growers but of Gunns.

    As I’ve said before, it’s our way or you risk losing everything. See you in Court.

  15. john hayward

    March 2, 2016 at 10:37 am

    It’s hard to see how this could have happened without a massive government-sponsored Ponzi scheme, and a largely self-regulated legal system which offers absurdly inflated returns to its practitioners for torturous processes which defy justice.

    There seems no apparent reason why it couldn’t happen again.

    John Hayward

  16. Karl Stevens

    March 2, 2016 at 10:13 am

    This is just standard operating procedure for administrators of a failed company. Because they can only deal in ‘unsecured’ assets, the administrators tend to initiate court proceedings in order to get paid through their legal costs.

    Because this practice is not specifically outlawed in the Corporations Act, they do it.

    ‘Liquidators’ on the other hand, deal in the assets that were ‘mortgaged’ to the bank. They get paid by spending decades selling those now bank-owned assets. (which in Gunns case were on-sold to Anchorage Capital).

  17. William Boeder

    March 1, 2016 at 11:39 pm

    Fascinating developments and considerably important contributions made available to the inquiry into the death throes of Gunns Ltd.
    The intrinsic evidence collated and supplied by the hand and best intended engagement by the courtesy of Mr John Hawkins and his probing into the foggy world of Forestry Tasmania and to their part played amid the Gunns Ltd misfortunes.
    This packet of evidence may at some stage support the necessary contentious unravelling’s of this sinister embroiling corporate glut-greed gorgon-like entirety of mischievous and controversial Abetz involved trumpeting’s of how great were the State’s MIS pork-belly undertakings.

    The non-emergence so far of the insolvency practitioner Korda Mentha and their alleged excessive costs rake-off during the periods commencing from their initial appointed role through to the present state of affairs, has not seen their selves called to present their primary role as the Gunns Ltd Insolvency undertakers.

    One can remark upon the parts played by the co-associate of Korda Mentha, PPB Advisory, their actions and strategies engaged in during the course of their participations and to the parts played by KPMG and their specialist accounting appointment that underlays its engagement in the insolvency riddle of Gunns Ltd.

    (We must not exclude other respected business principals that may in its very nature be to the part played by any given popular known business person, albeit in the name of Ahmed Fahour ‘CEO and MD of Australia Post) during his appointment as a director of PPB Advisory when much of the alleged PPB contra dealings were rising to their zenith, then of this man’s early departure from his directorship with PPB Advisory.
    There is the mystery as to the need for a well-respected business person to have himself released from whatever may have been his appointment association with PPB Advisory.
    One must realize the elite circle of business associates that Mr Fahour had accumulated in his 15 odd year climb to the highest point so far in his Australian business career, therefore that to sever his association with PPB advisory may well have been a rather astute foretelling of events later portending.)

    There is no intent or desire to impugn Mr Ahmed Fahour in relation to the extraordinary undertakings of PPB Advisory at any former time.

    http://www.afr.com/business/transport/australia-post-loses-another-executive-20150928-gjwcvi

    http://www.qt.com.au/news/how-can-the-ceo-justify-his-salary/2558596/
    to be continued/

  18. Trevor Burdon

    March 1, 2016 at 5:30 pm

    Henry, no doubt there is much for John Gay, his fellow Directors and his Executive to answer for. PPB’s Administrator’s Report foreshadowed an investigation into Gunns Directors. They say it commenced with ASIC, though despite my prompts in court they have yet to report any progress. It would make good sense to give investors, creditors and shareholders a status on that now.

    (My revised estimate of costs is now ~$240,000 – after a correction to briefing solicitor effort and calculating for 3 court days.)

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