Beleaguered fertiliser tycoon Pankaj Oswal says PPB Advisory has used Burrup Fertilisers funds in an “irresponsible and unacceptable manner” since being appointed receiver and manager of the company in December last year.
Mr Oswal was referring to financial documents recently lodged with the Australian Securities and Investments Commission, which he said showed PPB had charged $7 million in fees and disbursements and $4.6 million in legal fees since being appointed by financier ANZ.
“A review of these details show that PPB has shown scant regard for shareholders and staff and have used company funds in an irresponsible and unacceptable manner,” Mr Oswal said in a statement.
“It is also interesting that even after all of this expenditure, Burrup still has $US41 million in cash.
“Not bad for a company put into receivership.”
Mr Oswal also attacked PPB for what he called mismanagement of the plant, which has lost 60 days of operations since December due to fire and equipment failure, costing Burrup around $80 million in revenue.
“The claim by PPB that the shutdowns and startups are part of an ongoing maintenance schedule is laughable.” Mr Oswal said.
“It is worth noting that by comparison, when I ran the operation the plant ran for 420 consecutive days at 115 per cent of the name plate capacity.”
A spokesperson from Yara International, the Norway-based company in joint venture with Burrup, refuted those claims, saying the financial results spoke for themselves.
In Q2 2010, the Yara spokesman said, the result from Burrup for Yara was a loss of around $4.2 million.
In comparison, the Q2 2011 result was a profit of just under $12 million.
"In terms of the contribution to our business, a significant loss has been turned into a significant positive result," Yara said.
"We are content with the financial turnaround of Burrup and what’s more the cost level within the company is now much easier to understand compared with a year ago.”
Finally, Mr Oswal savaged PPB’s decision to appoint Flagstaff Partners to handle the sale of Burrup, and reiterated project stakeholders Yara International, ANZ and PPB were attempting to force him to sell the plant for a bargain price.
"The decision to appoint Flagstaff Partners to handle the sales process when it has no experience in such matters defies belief," Mr Oswal said.
"I see that Flagstaff fees are $385,528 for running the sales process, which appears to be going nowhere."
Mr Oswal is suing PPB and Burrup Fertilisers for $US491 million in cost overruns he paid to complete the project.
He and his wife, Radhika, are also challenging the validity of the receivership.
The Commonwealth Bank of Australia is also in the Oswals’ crosshairs, for selling the family’s Gulfstream jet at a discounted price to an organisation in the United States.
Mr Oswal said the majority of the litigation would be heard in Melbourne’s Supreme Court over the next several months.
PPB Advisory is being sought for comment.
