Information for Great Southern growers
Great Southern Managers Australia Ltd (GSMAL) is an Australian financial services licensee and the responsible entity of 43 registered managed investment schemes. The Great Southern Group has raised over $1.8 billion from 47,000 investors over the past five years for investment in its agribusiness projects.
On 16 May 2009, the directors of GSMAL, its ASX-listed parent Great Southern Limited (Great Southern) and around 35 other associated entities, appointed partners of Ferrier Hodgson as voluntary administrators of the companies. Shares in Great Southern are suspended from trading on the ASX.
Subsequently on 18 May 2009, secured creditors appointed partners of McGrathNicol as receivers and Managers of Great Southern and 11 of its subsidiary companies, including GSMAL.
The receivers have taken control of the charged assets of GSMAL and the voluntary administrators are now precluded from dealing with those assets.
Great Southern Fund Management Limited, which also operates a number of managed investment schemes, has not been placed into voluntary administration or into receivership and in this regard continues to trade as normal.
What is the role of the receiver?
The receivers' role is to take control of the business and of the assets of those companies in receivership. The role, powers and duties of the receivers are set out in the Corporations Act 2001, and where relevant, in the securities under which the receivers were appointed. The receivers are also subject to a duty to act in the best interest of members of the various schemes that GSMAL operated.
The receivers have stated they are working closely with the voluntary administrators to assess the status of the GSMAL schemes so as to develop strategies to preserve and maximise value. They are likely to consider relevant issues, including:
- Whether each scheme is viable. Factors impacting on the viability of the scheme include:
- the willingness and ability of existing scheme members to pay for any shortfall in operating expenses;
- the long term profitability outlook for each scheme investment project; and
- the potential impact of increasing investor default levels on the operating capital of the scheme.
- Whether another responsible entity can and should be found to replace GSMAL for some or all of the schemes.
- Whether, and on what terms, a suitable manager could be appointed to operate the various projects of a scheme.
What is the role of the administrators?
In general, a voluntary administration enables administrators to take control of the affairs of a company that is unable to pay its debts so that the administrators may, where appropriate, propose a deed of company arrangement to creditors that will allow the company to continue. The role, powers and duties of administrators are set out in the Corporations Act. An administrator acts for all creditors of a company.
The effect of the receivers' appointment to GSMAL means that the administrators do not have control of the charged assets of GSMAL.
Nonetheless, the administrators have obligations to carry out their statutory duties in respect to the voluntary administration of GSMAL.
Whilst the administrators are not able to deal with the GSMAL assets which are controlled by the receivers, the administrators have said they will work closely with the receivers to help ensure, to the extent possible, that growers' rights in the schemes are protected and/or are not unduly interfered with.
Are growers creditors?
Under each managed investment scheme, growers are owed certain obligations. The records of Great Southern will be assessed to determine whether growers are creditors of GSMAL. Depending on their individual circumstances, some or all growers may be unsecured creditors or contingent creditors of GSMAL.
Growers should refer to the website maintained at www.great-southern.com.au for the latest information available.
Growers may also wish to seek their own professional advice on this issue.
What is ASIC’s ongoing role?
GSMAL remains as the responsible entity of the schemes. ASIC will monitor the GSMAL (and its officers) in respect of the discharge of its duties as a responsible entity.
ASIC will continue to monitor the appointment of the receivers and Managers and of the administrators, to check whether they are discharging their responsibilities appropriately. The receivers and the administrators are responsible for providing reports to ASIC.
ASIC is also assessing the conduct of GSMAL, and other financial services providers, in relation to the marketing and operation of Great Southern’s registered managed investment schemes. If ASIC finds instances of wrongdoing and non-compliance with the law, ASIC will, where appropriate, take regulatory action.
ASIC will continue to update growers as our assessment continues.
Further information
For ongoing updates on the progress of the receivership, growers should refer to the information provided by McGrathNicol at the website www.great-southern.com.au
Also, the Great Southern Group’s existing toll free number (1800 258 348) can also be used for individual investor questions.
Information provided by the administrators can also be found on Great Southern's website www.great-southern.com.au or by visiting Ferrier Hodgson's website www.ferrierhodgson.com.
ASIC Website: Printed 02/04/2012
