Treasurer and FIRB Submission - Arrium Shareholders United
Dear Treasurer/FIRB,
We are representing a leading group of Arrium workers and shareholders who are very concerned about the prospect of the nationally significant assets are being sold to foreign buyer by the administrators KordaMentha in an action which appears to be violating the spirit of laws and justice in this country.
Firstly we believe that the administrators have abused the power they enjoy in manipulating the administration process and outcome, not in the best interest of all the stakeholders, but rather in their own benefits in maximising fees for themselves and their advisers via a prolonged and unfair administration for well over 12 months. It is astonishing to see Arrium is going through similar liquidation path as Ansett Airways upon which KordaMantha has kept the administration running for over 10 years without producing the financial accounts (source: http://www.smh.com.au/business/mystery-flight-of-ansett-accounts-20111120-1npaz.html)
Arrium is now reportedly trading profitably and cash flow positive, and has just received $1.6b cash from disposing its offshore mining consumable asset. The administrators however continue with their agenda despite market fundamental favouring the end of administration and the return to normal trading.
We understand that the honourable Treasurer and FIRB will be the ultimate gatekeeper to ensure Australian national interest are protected.
We also witness the administrators having so much power seemingly nothing can stand in their way and the sale transaction announcement, unfortunately for all Australian, is just a matter of time.
In view of the above we are writing to provide our submission to you to oppose the sale transaction and to raise the issues arising from the sale of Arrium steel, rails, ports and distribution assets to foreign buyer below for your considerations.
The reputation of our country and the well-being of our workers and their families are now at risk due to the unfair Arrium administration:
Insolvency legislation
Should a company with substantial trading profit, that never defaulted on any debt and has received $1.6b cash from assets sale, stay in administration and get liquidated?
For a prolonged administration (well over 13 months) with substantial fees involved for the administrators and their advisers, does it not raise the red flag to the authorities (ASIC, governments, politicians) to investigate?
Australia national interest
With the proposed sale of the strategic steel, rails and ports assets to foreign company, should the authorities undertake an urgent assessment of the impact of the sale proposal aganist national interest including tax, economy, pricing, jobs, defence and integrity of the remaining bidders?
Australia international reputation
If an international company like Arrium with substantial trading profit is forced to sell to third parties leaving creditors and shareholders out of monies, Australia will be seen by the international investment community as a risky country to invest as the corporate practice and insolvency regime do not provide reasonable protection to the stakeholders including financiers, notesholders, suppliers and shareholders.
Justice and Fairness
Why do trade creditors and suppliers need to lose monies for the pre-administration supplies they provided to a profitable company?
Why do workers need to face uncertainty and risk losing their jobs and reduced workers’ conditions?
Why does Whyalla steelworks need to be sold to foreign owner and risk to be closed by the foreign owner in the future?
Your urgent attention in this matter is appreciated.
Please do not hesitate to contact us directly to discuss this matter further.
Yours Sincerely,
Arrium Shareholders United
