'It looks dodgy': watchdog to look into land deal for state-significant project

The local government watchdog will investigate a NSW council over the high price it paid for land for a state-significant development proposed by a company with shareholder details registered to an empty KFC.

The council bought the land, which was selected by little-known company Murray River Energy, in August 2018 for $1.2 million, $500,000 more than local valuations estimated the property to be worth.

Minister for Local Government Shelley Hancock referred the deal between Murray River Council and Murray River Energy to the Office of Local Government's investigations team in response to a letter by Murray MP Helen Dalton, who has also referred the council to the state's corruption watchdog.

A Moama farmer whose land borders the site of the proposed plant.Credit: Kate Geraghty

Ms Dalton, from the Shooters, Fishers and Farmers Party, told the Sydney Morning Herald that as a newly elected official, she was shocked at the lack of oversight of council spending and council actions in NSW.

“It all looks extremely dodgy. ICAC [the Independent Commission Against Corruption] needs to investigate this thoroughly,” Ms Dalton said of the land purchase, which has raised questions among community members and councillors.

A report tabled to the council in August said a valuation indicating an upper price of $1.25 million was provided by Ray White Rural, Deniliquin, but it had not been given in writing and the report did not say when the valuation was provided.

The Kentucky Fried Chicken in Deniliquin has seen better days.Credit: Kate Geraghty

Murray River Council has not answered three separate requests from the Herald to clarify this.

According to Ray White's head office, the Deniliquin office closed in January 2018, about four months before Murray River Council, in the state's south-west, voted to buy land in Moama for up to $1.25 million for a company to build an ethanol plant. The proposed $90 million plant has been classified as a state-significant development due to its type, size and potential economic value for the region.

The report, authored by the council's acting chief executive Brian Barrett — who was not there at the time of the deal and has since moved to the embattled Inner West Council — said as the property was not on the market, the price potentially reflected what was required to convince an unwilling seller.

"Good governance would normally dictate that council seeks the advice of a registered valuer before acquiring land. However, as council was advised at the time it considered this report, the subject land was not actually for sale," the report said.

In July the council obtained a written valuation that put the worth between $790,000 and $1.13 million. The valuation also said rental of more than $50 per acre was possible but the council is leasing it back to the seller for less than a third of that.

The council had also loaned the company money to pay off a debt to nearby Edward River Council. The council did not respond to questions asking whether any part of the loan had been repaid, nor whether an audit of the deal on the land had been undertaken.

The Herald attempted to contact Murray River Energy director Gregory Finn but a woman who answered the phone at the rural Victorian address listed as Murray River Energy's principal place of business said "no comment" and hung up after asking who was calling.

Murray River Energy is the latest iteration of companies linked by a similar group of directors that have proposed setting up ethanol plants or anaerobic digesters in Junee, near Geelong and Longford in Tasmania.

Mr Finn has listed his shareholder address and previously his directorship address as the empty KFC in Deniliquin with the Australian Securities and Investments Commission. He previously told the Herald the KFC would be the office they used when the endeavour eventually went ahead.

Local real estate agent Jeff Shand, who owns the site, previously said the company leased part of the KFC building from him: "They’ve got people in there, they just come and go."

The company's registered principal place of business is in Warrion, Victoria, the same as Mr Finn's and most of the other directors' addresses. It is also registered to the address of an accounting firm in Shepparton, Victoria.

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