Elders looks at possible book tinkering as staff quit for rival Ruralco
Elders is investigating whether its live export trade accounts have been manipulated after seven staff quit the company en masse to join competitor Ruralco.
The staff handed in their resignations last week after being approached by Ruralco to help build its own live export business.
Elders said the resignations followed the discovery of a price discrepancy in its international trade accounts, but said it had no evidence to suggest the two were connected.
The internal investigation comes as Elders chief executive Malcolm Jackman is visiting Jakarta with Prime Minister Tony Abbott, where live exports are high on the agenda in discussions with the Indonesian government.
When asked if the company was investigating whether accounting fraud had occurred, Mr Jackman told BusinessDay: "Absolutely.
"Right now, we have no reason to believe the two issues are related, but they have occurred at the same time.
"Whether it is due to accounting treatments or anything else is a bit hard to tell.
"Clearly, when you're investigating something and you get that level of resignation from a management team, it's going to bring a different level of focus and intensity to the investigation."
The seven employees who resigned were from the company's cattle export trading division, including recently appointed general manager Hamish Browning.
The division is responsible for connecting live cattle sellers in Australia with buyers overseas, particularly in Asia.
Ruralco chief executive John Maher confirmed all seven staff were joining the rival group.
"We are setting up a live export business and we've been lucky enough to attract those staff to build that business," he said.
Elders is one of the largest suppliers of stock to the live export market. The resignations are a fresh blow to the trade division, whose previous general manager Tony Dage was made redundant in August.
It also follows attempts by Ruralco to take over Elders, as the struggling rural services business tries to stave off receivership.
"Ruralco has decided [it] wants to get into the live export business and decided the best away to do that was to make an offer to seven of our staff at the same time and in essence go after our business," Mr Jackman said.
Mr Jackman would not say what type of discrepancy had been discovered.
He said it was too early to tell whether accounting manipulations had occurred because of incentives targets.
He said he was alerted to the discrepancy more than a week ago by someone outside the division.
"We believe the export values were overstated," he said.
"We are trying to determine what has happened, who is responsible and how long has it been going on."
Mr Maher would not comment on the investigation. "That's a matter for Elders," he said.
Elders said the seven staff would work out their notices with Elders before joining Ruralco, and that their contracts had non-compete clauses that provided certain protections to the business.
Mr Jackman was among 20 business executives to accompany Mr Abbott on his first official visit to Indonesia on Tuesday.
Mr Abbott said during the visit that more work needed to be done to unblock the restrictions on the live cattle trade from Australia to Indonesia.