A number of dealer groups have called on the government to step in to help investors caught up in the collapse of agribusiness firm Great Southern.
Representatives from Australian Financial Services (AFS) and IOOF-owned group Consultum Financial Advisers each voiced concern for investors at Great Southern's first creditors meeting held yesterday in Melbourne.
"We need to approach the government for an enquiry but also for action. If we wait for the enquiry to take place then all the trees will have been eaten by termites and there'll be nothing for anybody," AFS representative Michael Butler said
Butler said the government was probably the biggest creditor, as they had paid out a huge amount in tax advantages to investors and stood to lose millions in dollars of income tax payments if bank receivers took over Great Southern's assets.
"We cannot trust the banks to be the responsible entity. The government needs to step in, take control and appoint an independent responsible entity," Butler said.
Consultum Financial Advisers representative Neil White also expressed concerns that investor growers would be at a disadvantage against the creditors which include ANZ, Commonwealth Bank and BankWest.
"The feedback we get is that irrespective of these proceedings, investors want to be reassured that every possible opportunity will be given to the smallest and largest growers to ensure that the projects continue," White said.
Ferrier Hodgson administrator Martin Jones said the administrator would support a federal government enquiry.
"We will respond to that and provide information as required and support the enquiry where we have a role to discharge," Jones said.
At the same meeting, creditor committees for the responsible entity Great Southern Limited (GSL) and the responsible entity for the managed investment schemes Great Southern Managers Australia Limited (GMSAL) and Great Southern Property Holdings Debenture Holdings were formed.
Ferrier Hodgson was also affirmed as administrator and will stay in office.
A second meeting of creditors will be held with key stakeholders and creditor committees, although no date was given for this meeting.
Last week Ferrier Hodgson was appointed as administrator of the Great Southern Group.
Subsequently McGrathNicol were appointed as receivers and managers of GSL and certain subsidiaries of Great Southern. This includes GSMAL.
Receivers have precedence over the administrators in the control of the Great Southern assets.
As of 30 April 2009, Great Southern had total liabilities of $996.4 million.
