Sanjeev Gupta’s Whyalla Ports collapses after state government intervention

Another Sanjeev Gupta-owned company has collapsed as the uncertainty engulfing South Australia’s steel city continues.

Whyalla Ports has gone into voluntary administration. Picture: Dean Martin

A Sanjeev Gupta-owned company which formerly operated the Whyalla port has been placed into voluntary administration.

The decision comes after the state government intervened in a legal dispute between the company – Whyalla Ports Pty Ltd – and Whyalla steelworks administrators KordaMentha, which threatened to delay the sale of the embattled site.

KordaMentha lodged a court action claiming GFG Alliance should have asked for consent from the State Government before it granted a port lease to one of its subsidiary companies.

The State Government then stepped in, introducing a bill which outlined the port was owned by OneSteel Manufacturing – another GFG company which was forcibly put into administration in February.

The Sanjeev Gupta-owned company was facing legal action against the Whyalla Steelworks administrator KordaMentha. Picture: Mark Brake

A GFG spokeswoman said the legislation change meant the company had “no option” but to place Whyalla Ports Pty Ltd into voluntary administration.

“Whyalla Ports revenue has been severely impacted by the actions of the South Australian Government,” she said.

“Whyalla Ports Pty Ltd is unable to engage in any commercial activity after the termination of its lease and the seizure of assets by the South Australian Government at the request of the administrators.

“These actions have resulted in a complete stop in all revenue streams and therefore no ability to pay creditors.”

No workers are expected to lose their jobs. Picture: Dean Martin

The spokeswoman also claimed that the Federal Court proceedings would have been decided in “its favour had the Australian legal system been allowed to determine the matter in the usual way”.

The decision will have no impact on the operation of the port, with no workers expected to lose their jobs.

A State Government spokesman said that “ministerial consent” was needed to lease the port.

“This consent was neither sought nor granted,” the spokesman said.

“The Government had complete confidence in the legal action undertaken by KordaMentha, however the legislative changes clarify the consequence of failure to gain consent and will ensure similar action will not be necessary in future.”

KordaMentha was appointed administrator of OneSteel Manufacturing that operates the steelworks and mine when the government forced the company into receivership three months ago over multi-million-dollars worth of unpaid bills.

Since then the state and federal governments have announced a $2.4bn taxpayer bailout with KordaMentha working toward getting a well-operating business on the market to produce steel.