http://www.news.com.au/heraldsun/story/0,21985,25623482-664,00.ht...

http://www.news.com.au/heraldsun/story/0,21985,25623482-664,00.html?from=public_rss

Nicole Lindsay

June 12, 2009 12:00am
TIMBER industry representatives want the corporate regulator to protect the interests of investors by appointing alternative managers to collapsed forestry and agriculture companies Timbercorp and Great Southern.

The Australian Plantation Products and Paper Industry Council (A3P) says KordaMentha and McGrath Nichol, the administrators and receivers of Timbercorp and Great Southern, have an "inherent conflict of interest" because they represent creditors and shareholders.

A3P chief Richard Stanton has called on the Australian Securities and Investments Commission to appoint a new responsible entity (RE) to manage the Timbercorp and Great Southern managed investment schemes.

"What we are concerned about is the trees keep growing and get managed and harvested, and there's some return to investors," Mr Stanton said.

A KordaMentha spokesman said a new RE would be welcome.

"KordaMentha would be delighted to talk to anyone who is interested in being the responsible entity. Why wouldn't we be?" he said.

"If there is an RE which can fulfil the obligations, then come on down."

But he warned Timbercorp was insolvent and it would take hundreds of millions of dollars to keep it going.

He rejected claims of any conflict of interest in KordaMentha's role.

"The MIS law requires us to act in the best interests of the growers, but we are in a terrible dilemma. The Timbercorp RE has no money.

"No one else is coming forward with the money. That's why we had to apply to the Supreme Court to have the schemes wound up."

The peak body, which represents the wood products and paper manufacturing industry, fears Timbercorp's and Great Southern's managed investment schemes will be "prematurely wound up", causing uncertainty in the industry.

A3P representatives met the Australian Securities and Investments Commissioner Greg Medcraft yesterday, following up a submission written on May 28.