Auditor-general challenges TT-Line to prove solvency amid deepening financial dispute
The auditor-general has called TT-Line’s solvency defence “ineffectual” and demanded proof after the ferry operator’s board dismissed his insolvency finding as “absurd”. LATEST
Tasmania’s auditor-general has doubled down on his opinion about the parlous financial state of government-owned ferry operator TT-Line, after company executives denied the business was insolvent during a parliamentary hearing earlier this week.
Following revelations auditor-general Martin Thompson had recently informed the Australian Securities and Investments Commission of his finding TT-Line was insolvent, chair Ken Kanofski told a government-business enterprise scrutiny committee on Monday the board did not agree with Mr Thompson’s assessment.
Despite the increasing costs of its ferry replacement program, and a $75m government bailout included in the recent state budget, Mr Kanofski told the committee TT-Line lawyers had written to Mr Thompson to reject his opinion.
“We’ve taken specialist advice, from a number of leading experts, from leading experts on the matter in the country,” Mr Kanofski said in evidence.
“When you consider the situation as a whole, then the circumstances in which the company could become insolvent appear so remote as to be absurd.”
In his own letter – addressed to parliamentary committee chairs Ruth Forrest and Helen Burnet – Mr Thompson defended his methodology, and called on TT-Line to produce the “external advice” its executives told the hearings had supported its solvency assessment.
Mr Thompson said that after reviewing the letter tabled by Mr Kanofski and the evidence provided by TT-Line, he wanted to clarify areas relating to the treatment of long-term debt, the operation of a debt guarantee, and matters of ongoing government backing.
The auditor-general said management had been obliged to consider solvency beyond a 12-month period; that TT-Line’s government debt guarantee provided no assurance about its ability to meet financial obligation; and that no forecasts had been provided showing how the company would meet obligations relating to future financial support from the Tasmanian government.
“On several occasions I requested that TT-Line provide any and all information that would support the Directors solvency statement,” Mr Thompson wrote.
“The only information provided was a letter provided directly from a legal firm acting for TT-Line.
“The letter was ineffectual in that it misrepresents the guarantee provided to Tascorp as providing comfort to TT-Line, relied on the support of external parties to TT-Line to provide an equity injection at some point in the future … and relied on modelling in the corporate plan which we found to be flawed and was subsequently withdrawn by the board.
“TT-Line has asserted that it has expert external advice that supports the directors’ and management position in relation to solvency.
“As part of our 2025-26 planning, I have directed that this advice is provided to me under … the Audit Act.
“I expect that the proceeding information will provide clarity on my role and the basis for the formation of my evidence-based opinion that is specific to the circumstances facing TT-Line.”
Originally published as Auditor-general challenges TT-Line to prove solvency amid deepening financial dispute
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