Tag: defunct company
An internal document details exhaustively the events over the past several years which tore apart the native title organisation, Lhere Artepe Aboriginal Corporation, and threatened the commercial entities linked with it.
The document, briefing notes for the directors of the corporation and Lhere Artepe Pty Ltd, the ultimate owners of the group's assets, was obtained exclusively by the Alice Springs News Online.
It details efforts to stabilise the group's finances and business dealings, and forecasts a brighter future.
But it also confirms what has been reported by the Alice Springs News Online investigation for over a year, drawing on a range of sources – and a lot more.
The conduct of the person referred to as the "former CEO" – Darryl Pearce – rates a frequent mention.
The document reports:-
• An estimated $7m loss arising from a failed investment in a civil engineering firm, CDE, arranged by Mr Pearce.
• A $3.5m loan, negotiated by him with an Adelaide company, ACA Finance: "The former CEO apparently negotiated a deal by which this loan would be reduced to $1 million in return for transferring three of the Mt Johns blocks to Guistozzi [the head of the company], but the agreement for this deal was not signed. As a result, the full $3.5 million remains payable and is in fact overdue," the briefing note says.
• Delays with the Mt Johns residential real estate development pushed it to the brink of the National Australia Bank taking control of the project.
• At the time of the briefing only seven buyers were left (of the touted near-sellout) who hadn't claimed back their deposits.
• The mess Mt Johns turned into was secured by the three IGA supermarkets (Flynn Drive, Hearne Place, Eastside) bought for about $14m in part with a Federal grant: "These arrangements were also negotiated by the former CEO and we have been questioned by Commonwealth public servants whether this is contrary to the terms of the Federal Government grant that partially funded the purchase of the supermarkets business.
"The former CEO did not inform the Lhere Artepe Enterprises board of any of these proposals in advance, nor seek the board’s views or approval."
• "An additional mortgage was placed on the supermarkets unbeknown to Commonwealth Government which put the grant funds in jeopardy," says the note.
• A deal over maintenance required in one of the supermarkets, involving blocks of land provided by the vendor, also apparently went pear shaped: "Without reference to the board of Lhere Artepe Enterprises, the former CEO arranged to transfer the land, for no payment to Lhere Artepe Supermarkets, to Lhere Artepe Services Pty Ltd. It is therefore apparently no longer available to Lhere Artepe Supermarkets to fund the maintenance work."
• The Board and members were being kept in the dark, it is claimed. There were just two meetings between April and August 2011.
The note says: "At neither of these meetings did the former CEO provide a proper written report to the board to explain the significant obligations and expenditures he had negotiated over the previous several months without reference to the board." ERWIN CHLANDA reports.
PHOTOS: Top – Publicly funded supermarket acquisition props up Mt Johns development. Above right – Darryl Pearce.