Former NT Beverages chief executive Hugh Jones ‘breached duties as director’, administrators allege

THE founder and chief executive of failed, taxpayer-backed water bottling company NT Beverages may have acted unreasonably and breached his duties as a director, an administrators’ report alleges.

Failed bottling company NT Beverages former chief executive Hugh Jones, in happier times.

THE founder and chief executive of failed, taxpayer-backed water bottling company NT Beverages may have acted unreasonably and breached his duties as a director, an administrators’ report alleges.

A supplementary voluntary administrators’ report, released last week alleges the bottling company’s founder and former chief executive Hugh Jones may have engaged in an “unreasonable director-related transaction” when the company provided a secured loan to a computer software start-up Mr Jones was also a director chief executive of.

The report provides the clearest picture yet of the “poor strategic management” of the company, which administrators claim to be at the heart of its failure.

Mr Jones told the bottling company’s administrators he did not receive any payments from the software company, but the report points to a “potential breach” by Mr Jones of his fiduciary duties, “namely, to act with care and due diligence”.

The administrators’ report says a “reasonable person would have engaged an established software development company rather than establishing a related start-up operation to produce the product”.

The software company was meant to see the bottling company provided with an “integrated software solution”.

The $107,000 paid to the software company, TISS group pty ltd, was a loan equal to the first year of a subscription to the software package, which never eventuated.

The bottling company’s administrators’s report says the $107,000 “was not in the best interests of the (NT Beverages) Group”.

The report also shows the bottling company was haemorrhaging money when the now disbanded, taxpayer owned NT Infrastructure Development Fund injected its first $9.23 million into the company.

$4.3 million of the injection was used to pay off the companies which had bankrolled the construction of the company’s head office while another $850,000 went to paying off trade debt.

The bottling company was at the time running at a significant loss, “and therefore required significant ongoing funding to continue as a going concern,” the report says.

A fire sale of the company is in its final stages, with the Territory taxpayer likely to “incur a significant shortfall” after the sale goes through.

The NT News’s attempts to contact Mr Jones since NT Beverages went into administration have failed.

NT Treasurer Nicole Manison has ruled out examining the ill-fated decision to invest taxpayer money in the bottling company.