Tiwi Islands – Northern Territory

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NT proposes cynical lease deal to ‘help’ develop Tiwi Islands… the rip off continues as always, via John Hicks

Posted by tiwiccbb on September 11, 2013

Now this – to add insult to injury.
So 300 square kms of most precious of the old growth forests on Melville Island were clearfelled – gone – thanks to Ponzi scammers Great Southern and the white business dominated Darwin based Tiwi Land Council – TLC – under the pretence Tiwi people were going to profit – and gain ongoing jobs;
30,000 hectares of noxious weeds Acacia mangium were planted and largely abandoned;
And now in the most contemptuous move ever –  $3.8 million “loan” to TLC (CEO ‘White King’ John Hicks) with the payoff of 10,000 hectares of ancient homelands to be donated to Hicks white business mates – for 99 years.
Are Tiwi people aware of what this will mean?

http://www.theaustralian.com.au/national-affairs/nt-proposes-lease-deal-to-help-develop-tiwi-islands/story-fn59niix-1226707896030

“Under a proposal from the Northern Territory government, traditional owners would give the government 99-year leases over about 10,000ha of land that could be developed for agriculture, an area two-thirds the size of the Ord Stage One irrigation area in Western Australia.

The government would also gain control of industrial land close to the new Tiwi Islands port — which some predict will be the best deep-water harbour in the region once construction is complete later this year — as well as an area of prime beachfront, which would be suitable for development of a resort or a hotel.

In return, the Tiwi would receive what sources familiar with the secret plan describe as a “bailout package” for their struggling forest enterprise, on which many have pinned their hopes for employment and progress.”

http://ecnt.org/campaigns/tiwi-forestry

 

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Great Southern Ponzi Scammer John Young still Sickeningly Rich

Posted by tiwiccbb on October 8, 2012

Courts catch up with Great Southern Plantations directors

ADAM SCHWAB
Business director and writer
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GREAT SOUTHERN PLANTATIONS
 

The protagonists behind one of the Australian villains of the GFC, collapsed agribusiness company Great Southern Plantations, look set to finally have their day in court. Well, sort of.

Seven former directors of Great Southern Plantations, including founder John Young, are facing a civil claim from the company’s liquidator, Ferrier Hodgson. In true form, the Australian Securities and Investments Commission is too busy spending $30 million losing other less damaging matters, like Fortescue’s alleged dubious disclosure, to bother with multi-billion dollar bankruptcies.

Like fellow agribusiness failure Timbercorp, Great Southern collapsed in a screaming heap in 2009 after its Ponzi structures were finally exposed. The damage was significant. In addition to shareholders, Great Southern ran 43 schemes with almost $2 billion invested in them.

Ferrier Hodgson is alleging the company’s directors failed to disclose the company had been subsidising returns for older schemes, with the directors allegedly breaching their statutory and fiduciary duties by overstating assets and understating liabilities and expenses. Directors subject to the action include Young, former managing director Cameron Rhodes, Phillip Butlin, Alice McCleary, Peter Mansell and Mervyn Peacock.

Great Southern’s business in very basic terms involved raising funds from retail (“mum and dad”) investors and using those monies to fund timber plantations (Timbercorp would later in its life invest mainly in horticulture schemes but Great Southern largely stuck with timber). In order to raise the funds, Great Southern tended to pay financial planners commissions of upwards of 10%. This made the economics of the venture virtually impossible. The situation was worsened by terrible management of the plantations and a general “bidding-up” of land prices. Great Southern itself was a listed company and had its own shareholders.

Great Southern’s business was turbo-charged in the early 2000s as tax deductibility rules allowed investors in its schemes (known as owner-growers) to claim an upfront tax deduction for funds contributed, even though profits from the venture wouldn’t flow for a decade or more (those investments were double leveraged with most owner-growers borrowing to fund their stake). In theory, everything sounded great. Investors would be able to get a tax deduction and then generate a return of around 10% annually when the plantations were eventually harvested. Great Southern and financial planners would collect fees and everyone would be happy.

As the billions of dollars flowed in, Great Southern’s share price rocketed from $0.50 in 2002 to $3.25 by 2004 (Great Southern was the second-best performer on the ASX over 2003 and 2004). The share price rise would make John Young a wealthy man — he appeared on the 2004 BRW Rich List with an estimated wealth of $140 million.

But while all appeared rosy, underneath the surface a very inconvenient truth was bubbling away. That is, the schemes weren’t on track to deliver the profits promised to investors. In fact, it appeared the schemes weren’t making any money at all.

Perhaps conveniently, Young would in 2005 sell more than $30 million of his Great Southern scrip into an institutional placement. Young would reap $4.65 a share — a price that other shareholders would only dream of years later.

Not long after, the first signs of trouble would emerge — but shareholders would have needed to be eagle-eyed to realise anything was amiss.

Buried on page 86 of its annual report, in a section entitled “contingent liabilities”, Great Southern quietly stated it had incorporated a company called Great Southern Export Company which had acquired timber from its 1994 scheme. The shelf company created by Great Southern had recorded a loss of $3 million during the year.

In short, what Great Southern did was use shareholder money to pay off investors in its early schemes when it realised that those schemes weren’t generating returns. This was classic Ponzi — using money from new investors to pay off old ones (Great Southern Export would spend a further $12 million subsidising other poor projects in the coming years).

At the time the scheme became apparent — two Great Southern directors, Peter Patrikeos and Jeffrey Mews, would almost immediately tender their resignations from the board.

Eventually, the Ponzi scheme would come unstuck and Great Southern would slip into receivership in 2009, as owner-growers, bankers and creditors fought for their share of a rapidly diminishing carcass.

It appears the Great Southern directors will finally get their day in court. Albeit civil rather than criminal court, with a liquidator, rather than a corporate cop on the other bench. Fortunately for Young, he is able to fund his legal defence from the proceeds of $33 million in share sales and $10 million in remuneration he received from Great Southern before its collapse.

*Adam Schwab is the author of Pigs at The Trough: Lessons from Australia’s Decade of Corporate Greed

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ABC report about state of Tiwi forestry project from Nov 2010

Posted by tiwiccbb on March 31, 2011

ABC report about state of forestry project from Nov 2010

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Tiwi Land Council wanted More Govt $ for Disgraceful failure -300 sq km of Acacia Mangium Weeds- But No Go –

Posted by tiwiccbb on March 19, 2010

Tiwi jobs dream dashed by funding knock-back

By Phoebe Stewart

Updated Thu Mar 18, 2010 3:05pm AEDT

A forest plantation on the Tiwi Islands.

The Tiwi Land Council says it needs funding to keep the plantation going.

//

A plan to create hundreds of jobs on the Tiwi Islands and resurrect the collapsed Great Southern plantations project has been scuttled by a funding knock-back.

The Tiwi Land Council’s Andrew Tipungwuti says the Tiwi Islands have asked for funding from the Aboriginal Benefits Account to keep thirty workers to maintain the plantation over the next four years.

He says the funds would also have been used to hire an extra 180 local workers to harvest trees.

He says the Tiwi people are disappointed the Indigenous Affairs Minister, Jenny Macklin, has not stepped in.

“We’re trying to secure the lives of the Tiwis but unfortunately it didn’t fall in our favour,” he said.

“Maybe the minister thinking that economic development isn’t such a good thing on Aboriginal communities.

“We’ve just been told the funding has been declined by the minister, there has been no apparent reason for it.

“Overall it’s just disappointing.”

A media release from Ms Macklin’s office said the Tiwi Plantations Corporation had asked for funding while they sought private investment but the commercial risks involved in the forestry project were substantial and best left to the private sector to assess and manage

Posted in Abetz, Christine Milne, environment, Global initiative on Forests and Climate, Great Southern, Howard, Indigenous, Landclearing, Northern Territory, Rudd, Tiwi Islands, Tiwi Red, Uncategorized | 1 Comment »

Two Tiwi forestry projects insolvent 20 Jan 2010

Posted by tiwiccbb on January 20, 2010

http://www.ntnews.com.au/article/2010/01/20/117321_nt-business.html

Two Tiwi forestry projects insolvent

January 20th, 2010

RECEIVERS for the Tiwi Islands forestry company Great Southern have lodged a formal application to wind up the plantation.

Perth-based McGrath Nicol will also shut down the Great Southern Group’s renewable fibre project.

These two branches of the group failed to attract any replacements as responsible entities.

This means the two managed investment schemes are insolvent. Recent reports suggest a note was sent to investors by the receiver that indicated the plantation needed $3 million spending on it “in the next six to nine months to remain operational” and any replacement responsible entity would incur a shortfall of $36 million over the life of the plantation.

The renewable fibre project needed $8 million in the next nine months and would suffer a $20 million shortfall over its life.

Both projects were on leased land on the Tiwi Islands.

The plantation is on 38 per cent leased land, while the renewable fibre project is 25 per cent.

But when rent was not paid last year, the Tiwi Land Council terminated the leases in October.

The mainland leases were paid until Christmas Eve – when the Tasmanian-based Gunns took control of the remaining eight projects.

All future payments on these lots must be made by Gunns.

Gunns’ takeover of responsibility has increased its holding of plantation timber from about 200,000 hectares to about 330,000ha, according to Gunns chief executive Greg L’Estrange.

“It’s a significant push to increase the size of our exposure to plantation timber in line with the board’s policy,” he told The Australian.

Gunns announced recently that following the December deal with Great Southern grower investors over the nine schemes, it would be able to provide its long-planned Bell Bay pulp mill in Tasmania with 100 per cent plantation timber.

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