The piggery half owned by the Keating family company revalued its land and buildings by $4 million in 1990-91 according to accounts put on the public register this week.
The accounts for Brown and Hatton Group Pty Ltd lodged with the Australian Securities Commission are unaudited. The company was converted from a public to a private company in May, 1991. Companies that are public companies at any time during the year are required to lodge audited accounts.
Mr Keating is not a director of any of the piggery companies and is not responsible in any way for the upkeep of their accounts. The accounts revalued buildings according to valuations made byt he directors. Coupled with revaluations of land, they form a new asset revaluation reserve of $4,062,000.
The accounts show that in the same year the company made losses of $1.518,847 and sales were down $3.5 million to $17 million. The accounts also converted a debt owed for purchase of goodwill of $4,450,000 to a company owned by former Minister for Tourism John Brown into shareholder equity. The $4,450,000 was placed in a subordinated loans account. Mr Brown at one stage owned 100 $1 redeemable shares, but these had been redeemed at the time the accounts were signed.
The net result of the revaluation and the loan-to-equity move was to increase shareholders’ equity in the company by $8 million.
When account was made for accumulated losses, the net shareholders’ equity was $7,537,900. The previous year, shareholders’ equity was $544,742, even though the company made a loss of $1.5 million and sales were down.
The accounts for Euphron Pty Ltd, Brown and Hatton Groups, holding company give a total shareholders’ equity of $8.4 million. Half of this belongs to Mr Keating and his family company. Those same accounts show Mr Keating and his family company bought their half of the total shares for $430,100.
It would be fair to conclude from these publicly available accounts that Mr Keating and his family made on paper $3.8 million from the revaluation by directors of land and buildings and the conversion of the debt owed to Mr Brown’s company.
The unaudited accounts do not explain on what basis the revaluations were made, other than that the bulding revaluations were made by the directors’ themselves. There is no indication whether independent valuations have been made.
At a time when profits and sales of the company were down and when rural properties in general are going through a hard time, they would need some explanation than the general rise in land values.
I put the question to the piggery, near Scone, and was referred to the rural manager, Cliff Thorogood, in Warwick, in Queensland. He said he did not know if there had been substantial building work since 1990. He said, “”You’re closer to the action.” (Canberra is closer to Scone that Warwick.) I asked who would know the reasons for the revaluations. Mr Thorogood said the company secretary, Chris Coudounaris.
Mr Coudounaris is one of two directors of Euphron. The other is Achilles Constantinidis. Mr Constnatinidis and his family company own half of Euphron. Mr Keating and his family own the other half. Mr Coudounaris own no shares in it.
Mr Coudounaris said he could not comment on why there had been a revaluation.
“”It is a private matter with the company,” he said “”We wouldn’t want to publish reasons why there has been a revaluation.
“”I don’t understand what the big deal is. He (Mr Keating) has made an investment in a company which is trying to boost exports and employment.”
There would be 200 new jobs at Scone with the new venture, he said. Why wasn’t that published.
The new venture Mr Coudounaris referred to is a $80 million joint veture between Brown and Hatton Group and the Danish company Danpork.
“”I don’t see what is in the public interest in the accounts,” Mr Coudounaris said. “”We’re trying to get the new venture through as quickly as possible. But we have to get approvals. Everything has to be done by the book. Planning approvals are needed and I’m not sure what else.
“”We are using world leading edge technology. We are adding to the export potential of Australia. I can’t see why everyone is concentrating on the accounts.”
I put the following questions in writing to Mr Keating’s office on Tuesday: Amended returns for Euphron Pty Ltd show an investment in 1990-91 by Mr Keating and his family company of $430,100 to gain half the shares of that company. They show present shareholders’ equity at some $8.4 million, giving Mr Keating and his family a gain of $3.8 million within one financial year. Does Mr Keating agree with those figures. If not, can he give the correct figures? If he has made a large profit to what does he owe his good investment fortune?
Amended unaudited returns of Brown and Hatton Group Pty Ltd (wholly owned by Euphron) show a revaluation by directors of its rural freehold land and buildings by $4 million between 1989-1990 to 1990-91. Does Mr Keating agree that those revaluations have flowed through the company accounts to increase the value of his and his family’s shareholding in Euphron?
Given the activities of the companies in the group, is Mr Keating satisfied that he has made all appropriate declarations of interest as a Member of Parliament and member of the Cabinet?
One of Mr Keating’s staffers said obviously the answer to the last question would be that Mr Keating had made all appropriate declarations. He would have to get answers to the other questions back to me.
No answers had been received by 4.30pm yesterday. A reminder message was left with Mr Keating’s office.
Documents obtained by the Opposition under the Freedom of Information Act and referred to in Parliament show that Danish piggery interests were looking for an investment opportunity in Australia at least since 1990. It could involve the import of live pigs or of pig semen. The aim was to use cheaper Australian land and feed and proximity to Asia, coupled with Danish know-how to get into the Asian market, especially Japan.
Senator Bill O’Chee said at a Senate committee hearing yesterday that an Austrade letter on November, 1990, had stated the Federation of Danish Industries believed that their fourth visit to Australia had been a great success and that all technical _ principally quarantine issues _ had been resolved.
Australian Quarantine Inspection Service officers at the hearing said that that could not be true. To their knowledge there had been only one meeting with the FDI, in May 1990, and that the Danes could not conclude that quantantine issues had been resolved.
They said it was not unusual for investors to say there were no problems where there were.
Senator Peter Cook, representing the Minister for Primary Industry, asked the officers if a minister or a Treasurer had made a request of AQIS, would a record be kept of it? The officers said that if something of that moment had happened it would be on file and there was nothing on the file.