Judge orders inquiry into insolvency firm’s role in collapse after it billed $2.2 million

A Federal Court Justice has ordered an inquiry into the fees and expenses incurred by PPB Advisory while the insolvency group investigated the 2010 collapse of Burrup Fertilisers.

But PPB has defended its handling of the case, claiming the inquiry is narrow in scope and the court threw out nine of the 10 claims brought against the firm by Burrup founder Pankaj Oswal.

The collapse of Burrup Fertilisers has dragged on for years. The business was originally placed in receivership in 2010, amid a dispute between Burrup and Norwegian part-owner Yara. Several court cases have arisen out of the company’s collapse.

Oswal has also criticised PPB’s handling of the case, pointing out $2.2 million in fees and expenses during the final six weeks of the receivership.

On Friday, Justice Siopis found an inquiry into the fees charged during the final six weeks of the receivership “is warranted”.

In an internal note, PPB chairman Ian Carson told colleagues the vast majority of claims brought against PPB were dismissed and the ruling was a confirmation of the company’s practices.

Nine of the 10 claims ranged from allegations regarding the competence of the receivers, the actual process of the receivership and deficiencies in selling the assets of the company.

The next hearing date is set for Friday, April 26.

Burrup was placed into administration in December 2010, with ANZ owed over $800 million. Oswal sold shares owned by himself and his wife for $580 million.

It is believed both Oswal and his wife remain out of the country. In a statement provided to Fairfax, Oswal said he welcomed the inquiry and “believes it will reveal further extravagant and unnecessary costs”.

”The Oswals will continue to hold PPB Advisory and the ANZ Bank accountable for their management of the receivership of Burrup Fertiliser and the ultimate sale of their shares in Burrup Holdings Limited,” he said in the statement.

PPB argues the costs were incurred due to the necessity of travelling to Perth for managing the receivership of the group.

In March 2011, PPB launched legal action against Oswal and his wife in an attempt to recover several million dollars the company accused the pair of siphoning out of the company.

 

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