Lempriere Grain administrator tells creditors he hasn’t found their grain or funds

CREDITORS of failed grain trader Lempriere Grain were told last week their money was “in a hole”.

CREDITORS of failed grain trader Lempriere Grain were told last week their money was “in a hole”.

Sources said administrator Andrew Spring, of insolvency expert Jirsch Sutherland, told a creditors’ meeting Lempriere Grain was buying grain for its half-owner Starcom Resources Pte Ltd, a Singaporean company run by its Indian owner Ajay Aggarwal.

Creditors were told Starcom Resources was providing capital to Lempriere Grain, which then bought and packed the grain before exporting it overseas.

READ MORE: GROWERS SEEK ANSWERS ON LEMPRIERE

Proceeds from sale of the grain went directly to Starcom.

Questioned by grain growers where was their money and grain, Mr Spring said it was “in a hole” and he was yet to find it.

Mr Spring told about 60 creditors who attended the meeting Lempriere Grain traded about $50 million to $85 million annually during the past five years but only made a profit in one of those years — about $2 million in 2016.

Lempriere Grain was placed in administration on March 21 with debts of $18.8 million.

Starcom Resources claimed to be owed $9.9 million.

In a letter to creditors, Mr Spring said Lempriere Grain’s financial position was discussed with Jirsch Sutherland by Peter Hodges, of legal firm Mills Oakley, who were acting for the grain trader.

“Subsequently, on 8 March 2019, we were referred to the company (Lempriere Grain) by Mr Hodges,” he said.

He said teleconference calls were held with Mr Aggarwal and his colleague Kiam Leng Soo on March 8, March 13 and March 20 before Lempriere Grain was placed in administration on March 21.

THE STORY SO FAR:

FARMERS MAY HAVE TO REPAY MONEY AFTER COLLAPSE

LEMPRIERE GRAIN TO MOVE INTO ADMINISTRATION

LEMPRIERE GRAIN IN SLOW PAYMENTS FOR GRAIN

Creditor Trevor Trewin, a farmer from Wycheproof, said he contracted 165 tonnes of wheat to Lempriere Grain in late February.

“They wanted it as soon as possible,” Mr Trewin told The Weekly Times.

“It was meant to be delivered on March 8.

“But the last load went on March 12.

“They must have known what was going on.”

Creditors tried to dump Mr Spring and his colleague Trent Devine as administrators at last week’s meeting and replace them with another insolvency firm.

Although the creditors had a clear majority in support of replacement of administrators — 52 to 11 votes from the floor of the meeting and through proxies — they were defeated on the amount of dollars held by creditors, $5.5 million to $11.2 million.

A motion to dump an administrator or receiver must have clear majorities on numbers of creditors and the dollar amounts held by them.

Mr Spring used a proxy vote he held on behalf of Starcom Resources — which accounted for $9.9 million of the $11.2 million — to defeat the motion to dump himself and Mr Devine.

A complaint has been lodged with the Australian Securities and Investments Commission over Mr Spring exercising the vote of a related entity to Lempriere Grain.

A Federal Treasury spokeswoman said the Government had amended the Insolvency Practice Rules on December 11 last year to restrict the voting rights of certain creditors related to phoenix companies to ensure the interests of honest creditors.

She said the same rules applied to all companies in external administration.

Victorian Farmers Federation grains councillor Jason Mellings, who lost money in the Lempriere collapse, said growers were disappointed they had the same administrator that was appointed by directors of the failed grain trader.