Perfectly entitled, as it was, ANZ Banking Group called in its loan to Kagara in April last year. That spelt the end.
The one-time billion-dollar base metals group was insolvent three weeks later, leaving 800 million shares worthless, $100 million in unpaid creditors and up to 500 people out of work.
Only three weeks before the rug was pulled, Kagara had put the finishing touches on the sale of its Lounge Lizard nickel mine in Western Australia. It sold it to Western Areas for the bargain price of $68 million cash.
ANZ took most of the proceeds, leaving just $1.4 million in the Kagara tin. It even sat on $22.5 million in guarantee money for performance bonds, earning interest on this for the next few months with no discernible whimper of dissent from the administrators.
The bank had only teed up $40 million in new finance for Kagara in late 2011, around the time that Kagara also raised $24 million in equity from investors in North America.
But cost blow-outs and a 30 per cent drop in the prices of zinc and nickel took their toll. ANZ pulled the pin and directors hand-picked the voluntary administrators of their choice.
They could hardly have picked better. One of the four administrators - yes, no less than four partners of FTI Consulting (nee Taylor Woodings) were selected for the task - was Stefan Dopking.
As revealed on Saturday, Dopking, who formerly headed up ASIC's insolvency division, rang the commission's special legal counsel before making an application for special relief from filing Kagara's accounts last October.
The relief was promptly granted. It means even less visibility for creditors. "They have no ore, they have no processing, no income and yet they continue to pay 30 employees on huge salaries," one told BusinessDay last week.
The administration has thrown up all the usual acrimony: claims that it has gone on too long, enriching administrators, lawyers and bankers but delivering zero return to creditors.
Piecing together the hodge-podge of regulatory filings - requests for a copy of the creditors report fell on deaf ears - FTI has raked out $5.54 million, its lawyers King & Wood Mallesons $4 million, merchant bank Investec at least $3.7 million, and another boutique adviser PCF Capital $1 million.
Kagara entered administration on April 29 last year. The next day the circular to creditors estimated costs of $250,000 to $300,000. That estimate turned out to be 1848 per cent too low.
In the 16 days to May 15, 2012, they were already going for the jugular, ripping out $704,412.50, or $44,025.78 a day.
Ostensibly left high and dry by ANZ, and instead of opting to take its fees from a quick wind-up and asset sale, FTI did a deal with Investec to provide $3 million in cash and a $23 million bank guarantee facility. It enabled it to take time selling assets.
There was no disclosure on how this facility was secured though, nor of the interest rate. And the exemption from providing accounts has creditors in the dark about how the administrators are spending their money. There were the sales to Transamine of $2.5 million but payment of $500,000 at the same time. There was $52,000 in "petty cash" and another $137,000 in debit card expenses. There are unspecified transactions with directors.
Mallesons was even paid to run a test case on whether a court could give an order to allow the company not to do disclosures - quarterlies, half-year reports, annual reports.
Effectively, creditors' money has been spent on curtailing disclosure to creditors themselves. Insolvency people may contend that the burden of disclosure is merely another cost to creditors which should be eliminated. Hence the exemptions. That might be a fair call, if creditors could trust administrators to act in their best interests; disclose all related party transactions and not drag out the process in a fee-fest. They can't.
And if administrators are charging almost $500,000 a month burning up creditors' money, there is no reason why they can't stump up a set of accounts so creditors can see what is happening with their cash and their assets.
Before it bit the dust, Kagara splashed $16 million on a copper project, Einasleigh. The cash flows filed with ASIC show Einasleigh received proceeds of $2.7 million last year. Did that $16 million spent on this copper asset turn into $2.7 million? Who are the counter-parties to these asset sales?
FTI was unavailable for comment.