The corporate watchdog will consider whether to take further action against one of UK billionaire Sanjeev Gupta’s Australian companies, after the NSW Supreme Court knocked back the company’s request for more time to file long-overdue financial reports.<\/p>\n
Liberty Bell Bay operates Australia’s only manganese alloy smelter, in northern Tasmania.<\/p>\n
It’s part of the GFG Alliance group of companies, owned by the businessman once hailed as the “saviour of steel”.<\/p>\n
It’s a private company, but Liberty Bell Bay needs to lodge annual reports with the Australian Securities and Investments Commission (ASIC).<\/p>\n
It failed to do that between 2021 and 2024, prompting the regulator to take court action against it and two other GFG companies with outstanding reports in June.<\/p>\n
In July, the NSW Supreme Court made orders requiring Liberty Bell Bay to lodge its outstanding reports with ASIC in October.<\/p>\n
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Sanjeev Gupta lost control of the Whyalla Steelworks. (ABC News: Nick Harmsen)<\/p>\n
The court extended that deadline twice more, but on Tuesday Justice Ashley Black dismissed Liberty Bell Bay’s request for a further extension and ordered that it pay ASIC’s costs.<\/p>\n
The ball is now in ASIC’s court, and the regulator will consider whether to take further action, either civil or criminal, against the company.<\/p>\n
Last week, ASIC’s deputy chair Sarah Court said financial reporting misconduct, including failure to lodge financial reports, would be an enforcement priority for the watchdog in 2026.<\/p>\n
Insolvency expert and University of Sydney professor Jason Harris said it was important to understand why Liberty Bell Bay wasn’t filing its annual reports.<\/p>\n
“Usually you’re not lodging your reports because you can’t, and that never sends a good picture to the regulator, or indeed to the public,” Professor Harris said.<\/p>\n
“If you can’t lodge financial reports, is that because you haven’t been maintaining proper books and records? Or is it because the picture is so bad that you’re trying to delay things to put off the bad news getting out?<\/p>\n
“I would certainly be calling on ASIC to continue its action and to take further action in this particular matter to ensure that that material information is being disclosed.”<\/p>\n
ASIC said separate to the court action, Liberty Bell Bay’s 2025 reports were due at the end of October, and had not been filed.<\/p>\n
In a statement, Liberty Bell Bay said it was working with its auditor to finalise its financial accounts as soon as possible.<\/p>\n
No money, untouched ore<\/p>\n
The company’s failure to lodge its annual reports makes it difficult to ascertain the smelter’s financial position and viability.<\/p>\n
<\/p>\n
Corporate law and insolvency professor Jason Harris believes a deeper look into Libery Bell Bay’s financials is necessary. (ABC News: Michael Nudl)<\/p>\n
GFG Alliance bought the Tasmanian smelter in 2020, before its main lender Greensill Capital went bust, prompting mine closures and thousands of job losses across the globe.<\/p>\n
“Mr Gupta’s global empire has involved governments taking over some of their businesses, has involved prosecutions in multiple countries, and has involved multiple insolvencies of multiple different businesses,” Professor Harris said.<\/p>\n
“So I would describe it as financially dire.”<\/p>\n
In February, the South Australian government placed the Whyalla steelworks into administration.<\/a><\/p>\n It owed creditors more than $1 billion.<\/p>\n The smelter produces manganese, which is essential to the domestic steel supply chain. (ABC News: Emily JB Smith)<\/p>\n That was around the same time the Tahmoor coal mine ran out of cash to pay suppliers and had to stand down workers.<\/p>\n Tahmoor Coal’s parent company, Liberty Primary Metals Australia, entered voluntary administration two weeks ago and the NSW government is currently trying to recoup almost $30 million in royalties.<\/a><\/p>\n Liberty Bell Bay had continued production, but in June, the smelter suspended operations and sent workers home on paid leave for a month, citing ore supply issues.<\/p>\n When ore did become available from its supplier in the Northern Territory, Liberty Bell Bay didn’t have the cash to order any.<\/p>\n In August, the Tasmanian government stepped in with a $20 million loan for 23,000 tonnes of ore<\/a>, but production still hasn’t resumed, and the ore is sitting untouched.<\/p>\n Suppliers are reported to be owed millions.<\/p>\n Large amounts of ore at Liberty Bell Bay remain unused. (ABC News: Maren Preuss)<\/p>\n The state government wrote to GFG Alliance last month, saying the company had defaulted on the conditions of its loan.<\/a><\/p>\n Although the company’s annual reports haven’t been lodged, a report by the Whyalla Ports administrators last month found Liberty Bell Bay was operating at a net loss of $80.3 million in June, with a capital deficiency of more than $120 million.<\/p>\n In a statement, Liberty Bell Bay said it was working with stakeholders with payment plans as it navigated 18 months of operational challenges.<\/p>\n “The impact of unreliability of ore supply due to the earlier force majeur of its main supplier, a significant deterioration in market conditions due to global oversupply of manganese and rising costs including energy and transport which are impacting most Australian businesses,” the statement read.<\/p>\n Georgian takeover plan ‘extraordinary and unprecedented’<\/p>\n Under pressure to restart operations, Liberty Bell Bay made a surprise announcement about its latest proposal to get working capital into the business.<\/p>\n The number of workers at Liberty Bell Bay has dropped in the second half of this year.<\/p>\n \u00a0 (ABC News: Maren Preuss)<\/p>\n The company has signed a memorandum of understanding with Steel International Trading Company (SITC), an exports company based in Georgia.<\/p>\n Liberty Bell Bay said final terms of an agreement were being finalised, but SITC would operate the smelter on a lease arrangement for up to five years.<\/p>\n “The arrangement is expected to inject additional working capital, supported by SITC’s secure access to key raw materials,” a spokesperson said.<\/p>\n Information about the company is scarce, although Forbes lists SITC as the seventh-biggest company in the former Soviet state.<\/p>\n Professor Harris described the proposal as “extraordinary and unprecedented”.<\/p>\n “There’s not a lot known about this company in Georgia,” he told 7.30.<\/p>\n “It does seem to be a significant entity that does have significant business operations, but none of those business operations appear to involve running a smelter.”<\/p>\n The Tasmanian government has first-ranking security over the smelter asset, and under the terms of its loan, any lease or change of control proposal would require the state’s consent.<\/p>\n Tasmanian Minister for Business, Industry and Resources, Felix Ellis, said if a formal request were received, the government would assess the proposal.<\/p>\n “We’ve been notified by Liberty Bell Bay, and we’ll work through due diligence processes,” Mr Ellis said.<\/p>\n Professor Harris said the government should be asking “lots of questions”.<\/p>\n “About how this has come about and how they haven’t been consulted on this previously. It’s very unusual.”‘Perilous’ future<\/p>\n The Liberty Bell Bay smelter usually employs about 250 people full time, but Robert Flanagan from the Australian Workers’ Union said that number was now more like 200, as some workers chose to find other employment.<\/p>\n Australian Worker’s Union’s Robert Flanagan says worker confidence has taken a hit.\u00a0 (ABC News: Ebony ten Broeke)<\/p>\n “I guess we can only presume that was driven by uncertainty about the future for the operations at Liberty Bell Bay,” Mr Flanagan said.<\/p>\n He said workers were continuing to be paid on time for coming to work and doing furnace maintenance, but he didn’t know where the money was coming from.<\/p>\n “The last six months has been a bit of a rollercoaster,” he said.<\/p>\n “What that workforce would like to see is the smelter resume production.”<\/p>\n Suppliers are reported to be owed millions.<\/p>\n George Town Mayor Greg Kieser said the smelter had had various shutdowns in its 60-year history.<\/p>\n George Town Mayor Greg Kieser says the smelter faces a ‘perilous’ future. (Supplied.)<\/p>\n “But this does feel somewhat different and there is a little bit of an underlying sense of anxiety that things are perilous,” Mayor Kieser said.<\/p>\n “We’re hopeful, very hopeful. But somehow this just does feel quite different.”<\/p>\n Professor Harris said unless there was some sort of government bailout, or a new owner with a lot of resources, the future for the smelter looked “pretty grim” based on the broader GFG Alliance picture.<\/p>\n “I’m hopeful that Liberty Bell Bay can be rescued, but I’m not sure that Mr Gupta’s company is the one to do that.”<\/p>\n Watch 7.30<\/a>, Mondays to Thursdays 7:30pm on ABC iview<\/a> and ABC TV<\/p>\n Contact 7.30<\/p>\n<\/p>\n
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