Investor representatives of the Timbercorp creditors committee have written to Minister for Superannuation and Corporate Law Chris Bowen asking him to clarify the role of administrator KordaMentha as the responsible entity (RE) for the beleaguered agribusiness company.
"The interests of investors and creditors are and always will be diametrically opposed. These are patent, profound and permanent conflicts. It is too simplistic to say that there is no conflict because the interest of investors is paramount," the letter said.
Chris Garnaut, a member of the committee, said there were questions surrounding who was funding the administration.
"We believe that the only reason that KordaMentha is supporting the termination of the forestry schemes is that it's in the best interest of the banks, not of the growers," Garnaut said.
The investor representatives called for ASIC to act in the case of an administration to ensure the rights of the investors were given proper weight.
The letter also raised concerns about the viability assessments that are currently being conducted by the administrators.
"Many of the schemes, which were viable at the time of the appointment of the administrators, risk becoming unviable by remaining in the Timbercorp Group under administration," the letter said.
"We see no reason why those schemes could not already be run by the new responsible entities outside Timbercorp."
Huntley's Management has nominated itself as a potential RE for Timbercorp's avocado and mango schemes and was considering taking action on other Timbercorp horticultural schemes.
Gunns Limited were considering undertaking the role of RE for the forestry schemes.
A KordaMentha spokesperson said the administrators would welcome anyone who would "put their hands up" to be an RE.
"I mean we would say 'come on down' but they need to be able to fulfil all the obligations and responsibilities of an RE and they are very onerous," the spokesperson said.
The administrators informed growers this week by letter that none of the potential REs were prepared to use their own capital for the schemes and advised termination of the forestry schemes.
Yesterday, KordaMentha applied to the Supreme Court in Melbourne about the future of the almond and olive schemes. This directions hearing will continue on 15 July.
"This gives growers time to seek independent viability assessments, so that the growers have independent information to see if they can continue," Garnaut Private Client Advisers head of research Chris Rylands said.
