Receiver defends role as judge orders probe into costs
Insolvency firm PPB Advisory has defended the price tag for its work on Burrup Fertilisers, after the Federal Court ordered a judicial inquiry into the fees and expenses charged during the final weeks of Burrup's receivership.
In one of many court cases sparked by the 2010 collapse of Burrup Fertilisers, Justice Antony Siopis has ordered an inquiry into the "propriety" of Melbourne-based PPB in accepting the role as receiver and manager of WA-based Burrup Fertilisers, and the extent to which PPB's staff being based in Melbourne increased the fees, expenses and disbursements charged.
Burrup Fertilisers' founder and former part-owner, the Indian entrepreneur Pankaj Oswal, criticised the $2.2 million in fees and $303,295 in expenses incurred by PPB in the final six weeks of the receivership.
Justice Siopis said on Friday that an "inquiry into the level of fees and expenses charged during the last six weeks of the receivership of BFPL [Burrup Fertiliser] is warranted".
But Ian Carson, PPB's chairman of partners, noted the bulk of Mr Oswal's claims against PPB were rejected and said the ruling was a "vindication" of the firm's work.
He added that it was proper for the receivership to be carried out on the east coast, as this was where the relevant expertise and relevant bank were located.
ANZ, owed $860 million, appointed PPB receivers and managers in late 2010, citing defaults, evidence of financial irregularities and court disputes. The 65 per cent share held by Mr Oswal and his wife in Burrup Holdings, the parent company, was later sold for $US580 million.
Mr Carson said PPB's fees for Burrup were $16 million and fees for law firm Freehills were $9 million - well below the $56 million in total costs claimed by Mr Oswal and much of it related to cross-claims with the couple.
From 17 original court cases related to the collapse, about six or seven were outstanding, Mr Carson said.
He added the Tax Office was still pursuing the Oswals - who are no longer in Australia - for a $186 million tax debt. PPB was also understood to have been pursuing the Oswals over financial irregularities worth an estimated $200 million.
In a statement after the ruling, Mr Oswal said he welcomed "judicial review into this matter and believes it will reveal further extravagant and unnecessary costs incurred as a result of appointment of receivers to the Oswals' once highly profitable business".
"The Oswals will continue to hold PPB Advisory and the ANZ Bank accountable for their management of the receivership of Burrup Fertiliser and the ultimate sale of their shares in Burrup Holdings Limited," he said.
A hearing has been set down for April 26 to discuss how the inquiry should be conducted and costs.