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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2025-04-03 Daily Xml
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KordaMentha

Mr McBRIDE (MacKillop) (14:58): My question is to the Premier. Could the Premier inform the house why KordaMentha was chosen as the preferred financial institution to administer the Whyalla Steelworks? With your leave, Mr Speaker, and the leave of the house, I will explain.

Leave granted.

Mr McBRIDE: KordaMentha is a Victorian-based business. KordaMentha assisted the purchase of the Whyalla Steelworks by Sanjeev Gupta. KordaMentha is apparently receiving $1 million a day to help administer the Whyalla Steelworks. South Australian financial businesses missed out on this process, so South Australian taxpayers' funds are being absorbed by a Victorian business with Victorian employees and a Victorian skills base. As history tells us, the State Bank collapse hurt the South Australian economy but what hurt more was the costly failed investments made outside South Australia.

The Hon. P.B. MALINAUSKAS (Croydon—Premier) (14:59): I thank the member for MacKillop for his question. There are a range of reasons why the state government has made the decisions it has in conjunction with the commonwealth. Of course, ultimately the body that selects the final administrator that oversees the exercise are the creditors themselves, of which there is a great number beyond the South Australian government. It is true to say that, as an initiator of the administration process, we did engage KordaMentha in conjunction with the federal government, and quite deliberately so. Why?

Principally because KordaMentha have a greater degree of familiarity with the steelworks and the port and the mine's operations as a result of their experience back in 2016-17. That breadth of experience that KordaMentha bring to the operations of the steelworks has already stood this current administration of the steelworks in good stead. They have been able to bring with it their corporate knowledge and also a number of personnel who have a great degree of familiarity in how the steelworks operates and bringing it to actuation in terms of how they go about doing their work, and we are very grateful for that. That was the reason above all else.

KordaMentha do enjoy a very good reputation in Australia for major corporate, or major liquidations, or major administration processes. This is what they do. This is what they are good at. On this side of the house, we have a view that you engage experts to do the things that they do well. We do not think you get administrators and corporate liquidators in to run public hospitals. We are a party that has been rather fulsome in our criticism of deploying KordaMentha in ways that we do not think are appropriate. We think they know less about running public hospitals than they know about running steelworks.

We will operate without fear or favour in the deployment of KordaMentha's skills. We are very grateful—very grateful—that they are on board. We think that Mr Mentha and his team are doing an exceptional job thus far in terms of what they have been able to achieve at the steelworks. They are building up. They are not just stabilising operations at the steelworks; they are also—

Members interjecting:

The Hon. P.B. MALINAUSKAS: I am doing my best, member for MacKillop, to answer your question without getting distracted by what is being discussed after a big sitting week. They are doing a good job. Obviously, they are already employing people on the ground in Whyalla on top of stabilising the business. We thank them for the work that they are undertaking. We think they are going to be at it for some time yet. I should note that KordaMentha have engaged very senior lawyers, like Leon Zwier, who enjoys an exceptional reputation. KordaMentha have engaged 333 Capital partners, who are leading the sale process. Again, they have hit the ground running.

We hope that in the not too distant future, once the business is stabilised, we will then move into the transition phase of going from stabilisation to the formal sale of the exercise and, like I said, there will be other people who play a role in that regard beyond KordaMentha themselves. I appreciate the tenet of the member for MacKillop's question. Running an administration is an expensive exercise. The fees are substantial. There is no denying that, but there are good reasons why we have chosen KordaMentha to do this. We look forward to there being a strong outcome in the end.

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