Rob de Fegely, Chair, and Steve Whiteley, CEO, of Sustainable Timber Tasmania (STT) have never looked so happy. In the recent 2018 Annual Report, they reported STT has zero debt and $49M in net income.
How did they turn STT around so quickly? The simple answer is theft.
Casting integrity and transparency aside, they are in receipt of stolen goods – goods comprised of former MIS grower assets on state land. The Liquidators (PBB) and STT (formerly Forestry Tasmania) negotiated a secret deal, and are steadfastly refusing to disclose the terms of the settlement.
The STT Board will not respond or table the matter – see TT article “Invest in Tasmania – bah!”, 4th Oct 2018. The STT Executive, Minister for Resources, Guy Barnett and possibly their GBE partner, Treasury are complicit in making that deal.
- MIS Claim for $39m for 14,000 ha of MIS timber on state land, based on establishment costs
- STT Counter Offer for $0 for those timber assets based on rental breach by GPL/Gunns
- STT ~ PPB Settlement, nefarious and secret for an estimated $1.4M scaled from $100/ha
- STT Sale for $60M for 29,000 ha of timber, including much harvest-ready MIS timber
And adding for a bad but pragmatic settlement:
- MIS Claim Worst Estimate for $39M discounted to $31.7M for related GPL liabilities
Given MIS grower assets were already disclaimed by PPB for GPL, and GPL debts (not growers) were now a shared liability, and assuming GPL rent to STT (3yrs at $70/ha for 14k ha), and the contracted GPL 12% share of MIS harvest (or asset), to GPL for other debts(not growers) to STT.
The STT ~ PBB negotiation was not investigated in court, but, true to bad precedent, Justice Judd deferred to the commercial negotiation and settlement reached by the Liquidators, PPB Advisory. PPB have not met their fiduciary responsibility to growers. Insolvency practice should be added to the terms of reference in the Financial Services Royal Commission and a submission to that effect has been lodged there.
STT was so keen to realise the whole grower asset for itself, it forced the rental breach by not allowing any earlier sale or harvest. Over the last two years it has shifted as much of its hot goods as possible from growers’ harvest-ready lots. Meanwhile, it is holding onto the value-added lots pruned by growers, while the trees fatten up. As does the balance destined for future chipping. Ironically, the related Private Forests Tas is already bemoaning the lack of new plantation investment, and the gap in ‘inherited’ resource supply.
Growers have bailed out STT, but shamefully growers are to be satisfied with $100/ha, which STT is reselling for over $2,700 per hectare. Later woodchip lots will fetch 10% more and clearwood twenty times that. The figures could be tightened up, but roughly, growers were due $31.7M even after covering GPLs debts related to their lots. STT has the cash now they’ve sold growers trees, and $31.7M less ~$1.4M paid is $30,300,000 fairly owed to real investors in Tasmania.
This Government Business Enterprise should be beyond reproach, yet in action Sustainable Timber Tasmania mocks good governance. It reflects poorly on the Tasmanian government, and its unique way of doing business – by theft.
That was $30,300,000 . . . now give it back!
Trevor Burdon is a Business and IT Consultant, who most recently was decommissioning Telstra’s original Silver Lining cloud. Resident in Melbourne he expects to eventually return to Tasmania when he can see a clearer sky over a better government. Though critical of Gunns, he invested in early MIS schemes to protect heritage forest and provide resource for new value-added industry. On ASIC’s pathetic advice that he complain in Court, he appeared at the commencement of the Gunns Plantations Liquidation (Proceeding SCI Vic 2013 2095). Uniquely, as an individual grower investor, he has been in attendance ever since, alongside the properly-resourced Liquidators and Receivers counsel at the bar.