The West

Oswal in new tild against receivers
Oswal in new tild against receivers

Pankaj Oswal has re-emerged to launch fresh legal action against receivers of his Burrup Fertiliser empire over more than $31 million they and their advisers pocketed in fees from the sale.

The litigation by Mr Oswal, who left Australia to restart his career in Dubai, marks more than two dozen actions launched by the controversial Indian tycoon since he lost control of his debt-laden firm in late 2010.

However the latest push, if allowed, will represent a rarely tried test case: he wants the Federal Court to publicly examine PPB Advisory's management of the firm while it was receiver under section 423 of the Corporations Act.

It comes as the Federal Government considers possible moves to overhaul the insolvency industry, including that it be opened up to competition, that liquidators be licensed and that a majority of creditors have the power to get rid of a liquidator.

The Government is currently reviewing public submissions from an 18-month-old Senate inquiry into the industry, but amid complaints it is dragging its heels says it has the "aim" of introducing legislation by the end of this year.

Mr Oswal's lawyers claim that PPB, its lawyers Freehills and advisory firm Flagstaff Partners unduly enriched themselves by taking more than $31 million in fees during the 14-month receivership.

They also complain about the receivers' action to leave $130 million of cash in Burrup rather than paying down debt which would have reduced Mr Oswal's exposure to ANZ.

A spokesman for PPB yesterday said the receivers had stabilised the firm and delivered savings well in excess of its fees, including $35 million from retendering maintenance costs, and called on Mr Oswal to return to Australia.

"We have always regretted that Mr Oswal would rather talk to us through the courts rather than come back to Australia and see us directly," he said. "Surely this has got to be his last gasp?"

ANZ appointed PPB as Burrup's receivers in December 2010 in a bid to recoup about $860 million owed by Mr Oswal citing financial irregularities.

Mr Oswal's former business partner Yara International and US firm Apache Energy seized control of the company in February.

The last time Mr Oswal complained about fees being too high, PPB and its advisers had claimed about $14 million in fees although some of this was for legal costs defending Mr Oswal's numerous claims. The advisers won a further $18 million related to the transfer of shares in the company.

Mr Oswal provided $55,000 in surety and a ruling on whether the court will hear the action is set for July.

The West Australian

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