Pastoralists and Graziers Association of WA on brink of collapse amid allegations of ’serious financial misconduct’

The Pastoralists and Graziers Association of WA, which represents Gina Rinehart, Andrew Forrest and Kerry Stokes’ pastoral interests – is on the verge of collapse amid allegations of ‘serious financial misconduct’.

Andrew and Nicola Forrest at their Minderoo pastoral property.

The influential farming body that represents Gina Rinehart, Andrew Forrest and Kerry Stokes’ pastoral interests is teetering on the brink of bankruptcy amid allegations of “serious financial misconduct”.

The Pastoralists and Graziers Association of WA stood down all of its staff overnight Thursday and shut its doors, saying it had “paused” operations after discovering a major hole in its budget, potentially related to internal misconduct.

In a statement posted online late on Thursday night, PGA board member Digby Stretch said the organisation’s executive had recently become aware of “serious financial misconduct”.

“The PGA acknowledges there is a financial deficit in our current modelling and are working hard to scope and rectify it.”

PGA president Tony Seabrook told The Australian the organisation’s board had no idea of any looming financial issues until this week.

“All of a sudden, we found out that one of our people has been a bit loose with the truth when it comes down to finances, and got us into a corner that no one had any idea about,” he said.

The veteran West Australian farmer said there was “no suggestion” the crisis could force the lobby group to permanently shut up shop, however.

“The support that the association has received over this event from members and people outside the industry has been absolutely astonishing, and we are so far away from shutting up shop and going away,” he said.

Mr Seabrook would not give details of the problems that triggered the crisis, but said the PGA’s financial problems had been “well disguised” and its board had been deceived by the financial reports handed over by a key member of its small staff.

“It’s been so well disguised, so well hidden, it was very hard to find out, and we’re still trying to find out what’s happened,” he said.

While relatively small, the PGA has been a major player in WA conservative politics for decades, helping lead the backlash against attempts to ban live exports.

Gina Rinehart.

It counts the pastoral and grazing interests of rich-listers such as Mrs Rinehart, Dr Forrest, Mr Stokes and Paul Holmes a Court as members. The PGA has offices at a building owned by Mrs Rinehart’s Hancock Prospecting in West Perth.

While the PGAWA statement did not give details of the issues facing the organisation, industry sources say the financial problems came to light in the face of an end-of-month deadline to settle a debt to the Australian Taxation Office.

Mr Seabrook confirmed the ATO claimed the organisation owed money, but said he was not able to give details of the amount or reasons.

“I don’t want to say anything, because we are putting in place a plan to move forward, and if I say anything at all, I’m just probably jeopardising things we might do into the future,” he said.

“But apart from the ATO, we don’t owe anyone any money.”

The PGA sold its own offices in Perth in 2009 and is said to have banked the proceeds – believed to be more than $2m at the time – in a trust account, with the interest contributing to its ongoing revenue.

It is not yet clear what has happened to that capital, but sources say the current crisis has been sparked by the realisation that money is no longer accessible.

The Australian understands the PGA has been involved in a prolonged dispute with the ATO, with the tax office said to have lost patience and demanded payment of up to $2m including penalties by the end of January.

“Although there’d be a lot of people – bureaucrats and government officials – rubbing their hands together to think that the PGA is no longer there to give them a hard time, well, I’m sorry, they’re going to be disappointed,” Mr Seabrook said.

In a written statement on Saturday, Mrs Rinehart told The Australian: “Our family have been pastoralists for generations and have always highly regarded the Pastoralist and Graziers Association and the efforts it has made over generations to stand up for those battling on the land. I hope its difficulties can be over soon, and it continues to provide its services to help those on the land.”