The Australian Securities & Investments Commission launched their investigation into Gladstone Ports Corporation last week

The Gladstone Ports Corporation has acknowledged its referral to Australia’s corporation watchdog over suspicion it has broken the law. More here:

The Gladstone Ports Corporation has acknowledged its referral to Australia’s corporate watchdog over suspicions it has broken the law.

GPC was reported to The Australian Securities & Investments Commission by the Queensland Audit Office (QAO) late last week over potential noncompliance with legislation.

A QAO report tabled on December 10 found that GPC had spent $1,530,201 on six termination payouts since 2018, along with more than $10 million on legal costs in the 2020-21 financial year, almost double the cost of the previous financial year.

It also found that seven key management personnel and executives had left GPC since December 2018 and concerns were raised relating to the propriety of decision-making by the board and senior executives, including non-compliance with legislation, which would increase the risk of waste of public resources.

“In recent years, Gladstone Ports has had frequent changes to key management personnel and executive positions. These changes have negatively impacted on the governance structure, on reporting, and on the board’s ability to enforce the desired decision-making culture,” a summary of the report read.

“The changes to executives have also had a high financial impact, including six termination payments totalling $1,530,201 and related legal fees in 2020–21.

“The lack of policy, guidelines, and board oversight for these termination payments has raised concerns about the propriety of decision‑making.”

The Audit Opinion results in the report also revealed Gladstone Ports was the only transport entity audited that did not meet its legislative deadline of August 31, 2021.

“The Gladstone Ports certification was delayed by management due to our request for additional assessments of the remuneration disclosures detailing salary and other benefits to ex-key management personnel,” the report read.

“The financial statements were subsequently updated with additional disclosures relating to termination payments and certified on 14 September 2021.”

A GPC spokesman said the business, which is a Queensland government-owned corporation, acknowledged the report by the QAO.

“GPC has committed to addressing recommendations, ensuring it remains an exceptionally performing state government owned port,” the spokesman said.

“GPC remains committed to delivering for Queensland, with demonstrated performance and financial achievements in 2020/21, delivering more than $110 million to the State, including $20.6 million for initiatives backing maritime jobs in Queensland.

“GPC has a strong track record of running safe and busy ports to ensure we deliver sustainable economic growth and prosperity for the regions where we operate.

“GPC remains focused on governance and oversight, allowing the organisation to deliver on the priorities of jobs, trade and regional prosperity.

“The outlook for 2022 is very promising, with strong trade forecasts and demand for energy, particularly LNG.”

The spokesman said GPC ports were featuring in considerations for developments in renewable energy, with emphasis on Green Ammonia and Hydrogen industries and export opportunities.

Queensland auditor-general Brendan Worrall said during the audit two matters raised concerns about the corporation’s compliance under the Government Owned Corporations Act and the Commonwealth’s Corporations Act.

He said in the report GPC did not initially provide a report to QAO or ministers about a payment to a former CEO.

Mr Worrall also said GPC failed to “appropriately approve and sign all board minutes”.

“These compliance matters resulted in us reporting three significant deficiencies to Gladstone Ports,” he said.

“We also reported the matters to the ministers and the Australian Securities and Investments Commission.”

Mr Worrall made several recommendations to address shortcomings in Gladstone Ports‘ governance and oversight.

These included that policies be updated to provide guidance of payments through deeds of settlement and release.