Stronger protection needed for contractors left out of pocket from Kagara sale
1 November 2013: KAP Leader and Federal Member for Kennedy, Bob Katter has called on stronger legislative protection for contractors left out pocket after the sale of north Queensland mining company Kagara Mining, after attending the third creditors meeting in Cairns yesterday.
“The legislation provides no effective protection whatsoever to employees, contractors and suppliers.
“Approximately 40-50 turned up at the meeting, out of an estimated 800 contractors, which is a tell-all sign that many people are losing hope in recovering what is owed to them; after what has been and continues to be, a long and drawn out process,” said Mr Katter.
Mr Katter and the State Member for Dalrymple Shane Knuth have been working with local contractors since Kagara Mining went into voluntary administration in April 2012 leaving a reported almost $100 million owing to 800 creditors.
“We understand that further intense discussions are taking place with potential purchasers, and we hope that this will provide us with an opportunity to ensure that workers, suppliers and contractors are paid what is owing to them.
“The potential sale will deliver ongoing employment from the Atherton Tablelands to the Charters Towers region of what we hope will be the creation of some thousand jobs,” said Mr Katter.
Mr Katter said that Australia should take a leaf out of Germany’s book, referencing their model which seeks to support companies to get back on their feet and ensure creditors are paid what they are owed.
“In Australia there is an incentive to go into liquidation, because the Government is obliged to pay the workers out.
“However, if you try and fight on, keep the industries going and Australians employed for the good of the nation and local economy – then the company has to pay the workers out.
“So in Australia the smart bloke shuts the company down and lets the Government pay the wages; but in Germany the Government only steps in to pay the wages, if the company continues to operate and generate employment,” said Mr Katter.
Mr Katter, in a senate enquiry submission into the performance of the Australian Investments and Securities Commission (ASIC) has criticised the regulatory watchdog for consistently failing to protect and stand up for innocent victims caught up in company failures.
“After lodging a complaint about the sale of Kagara Mining with ASIC, it took a mere 48 hours to receive an answer back that there was absolutely nothing wrong.
“Given the number of documents that would have to be reviewed and the complexity of the case, we believe that this matter requires serious consideration and attention and that this could not have been remotely achieved by ASIC in two days,” said Mr Katter.
Mr Katter said that the outcome of the meeting was to extend the Deed of Company Arrangement (DOCA) until 16 December 2013, at which point another creditors meeting will be convened.