By ERWIN CHLANDA
A spokesperson for Indigenous Affairs Minister Jenny Macklin said this afternoon she understands the Department of Families, Housing, Community Services and Indigenous Affairs is looking into issues surrounding the use Aboriginals Benefit Account (ABA) funds by a company linked to the Lhere Artepe native title organisation.
The spokesperson said this was to “ensure that all ABA funds have been used appropriately.
“Grants from the ABA are made to support projects which benefit Aboriginal people in the Northern Territory.”
Posting of January 10:
The Alice Springs News on Tuesday reported it had obtained an email exchange revealing a bitter dispute about the purchase of shares in a company.
It casts more light on the deal by an affiliate of the Lhere Artepe native title organization, Lhere Artepe Enterprises Pty Ltd (LA Enterprises.)
However, the main players are keeping mum on what appears to be an unfolding scandal.
The company, CDE Civil, collapsed soon after the majority shareholding was bought by LA Enterprises.
As reported last week, it appears the deal was financed substantially by mortgaging supermarkets bought by the affiliate for $14m including a $6m grant from the Federal Government-administered ABA.
The Office of the Registrar of Indigenous Corporations (ORIC) said “no comment”.
LA Enterprises, the owner of the three IGA supermarkets, has not responded to a request for comment made yesterday. We asked whether it had approved the actions mid-last year in relation to CDE Civil by its employee Darryl Pearce, who was sacked in December.
We sent a copy of the email to the board of LA Enterprises and its chairperson, Patricia Miller. She is also the Deputy to the Administrator of the Northern Territory and the longtime director of the Central Australian Aboriginal Legal Aid Service.
We asked whether she and the board had been aware of Mr Pearce’s email, and whether it had had their approval. A spokeswoman for Mrs Miller, a member of the influential Liddle family, told the News she would convey to Mrs Miller and the board the request for comment. None had been provided by the time of posting this report.
CDE Civil, which was engaged in the construction of the stalled Lhere Artepe real estate development in Mt Johns Valley, was put into liquidation in September 2011 with reported debts of $2.5m to 56 creditors.
We asked LA Enterprises, the majority shareholder of CDE Civil, on December 17 last year what consequences this would have for the town’s native title holders. No answer.
The email of May last year leaked to the Alice News suggests this is how the share deal unfolded.
Mr Pearce, on behalf of LA Enterprises, obtained a 51% shareholding.
The CDE group was initially in the hands of brothers Robbie and Shannon Rusca, members of an Aboriginal family, respected in the business community for its record of many decades in mining and civil works in The Centre and the Top End.
The string of substantial businesses had been started by Territory identities, their parents Sid and Jenny Rusca.
In the email exchange Peter Atkinson, the administration manager of the CDE Group, told Mr Pearce the Rusca brothers “want to sell you their shareholdings at the same price as you paid the other shareholders”.
Robbie Rusca “understands that you paid $3.5 million for 51% so is requesting $2.4 million for the 33.3%” he and Shannon Rusca were holding. The brothers would then resign.
Mr Pearce, on behalf of the “Lhere Artepe Group”, offered the brothers just “a full and final amount of $600,000 being $400,000 in ‘CASH’ and $200,000 in assumed debt for the shares plus cash”.
It was clearly a take-it-or-leave-it deal with a hefty sting in the tail.
Mr Pearce says in the email: “If the offer below is not accepted that is fine, but I must indicate that due to the position of the company we will be seeking a capital injection from the shareholders if the position of the company does not improve and we will be seeking EACH shareholder to contribute $1,000,000 EACH for a war chest of $4,000,000 CASH in July 2011 if a share holder chooses not to participate in the capital raising then their share numbers will be diluted down to reflect their none [sic] participation in the capital raising.”
What that clearly meant was that if the Ruscas can’t come up with a $1m each, they lose their shares.
Says Mr Pearce: “This is a full and final offer and will not be repeated nor bettered under the current circumstances or situation. Whilst we make this offer make no mistake that we will take any and ALL legal action to protect our investment in the group including using the full extent of the law to get all remedies available to us under the shareholders agreement and if that ends up sending people financially to the wall then so be it, as after the way we have been treated we will not go easy on anyone.”
The May 2011 email exchange indicates serious tensions in CDE between the Ruscas and Mr Pearce.
Notwithstanding this Mr Pearce drew liberally, in a glossy brochure (pictured) promoting what was now the company he controlled, on the good reputation of CDE that the Ruscas had built up over the years: “CDE has a depth of experience spanning a wide variety of projects ranging from open cut mining, major road developments to subdivisions, tailings dams and airstrip developments.
“Having a significant Aboriginal workforce CDE ensures a strong relationship and understanding with Indigenous people and their country’s flora and fauna,” says the brochure.