Vic Libs want foundation bosses to resign

Rick Goodman
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Victorian Liberal Party president Michael Kroger has had a partial win over the Cormack Foundation

The Victorian Liberal Party has had a partial victory in its legal stoush with its biggest donor the Cormack Foundation over the foundation's $70 million war chest.

But the party has failed to gain full control of the fund and Liberal state president Michael Kroger wants Cormack's directors to resign and hand the reigns over to the party.

Cormack Foundation was established by Liberal administrators to handle the proceeds from the sale of radio station 3XY in the late 1980s, during Mr Kroger's first stint as party president.

The initial funds of $15 million have since grown to almost $70 million and the Liberals want control over it.

A legal spat has gone through the courts over who owns the foundation as the Victorian Liberals gear up to fund their upcoming election campaign.

Federal Court Justice Jonathan Beach on Thursday decided the Liberals were entitled to 25 per cent of the shares in the foundation.

The judge found the Liberals had originally held two-thirds of Cormack's shares when it was established but the number of shareholders had since grown.

Victorian Liberals boss Mr Kroger said he was pleased the court held that the Liberals were the majority shareholder when the Cormack Foundations was established.

He now wants the foundation's directors to resign and give back control of the $70 million fund.

"We're now proposing to write to the Cormack directors asking them to acknowledge and accept the decision of the court and resign as directors and shareholders," he said after the judgment.

"And restore the ownership of the funds in the foundation to the Liberal Party."

Mr Kroger said that over the years the foundation issued further shares to people without the Liberal Party's knowledge or consent.

He said "further options" would be looked at if Cormack's directors did not return control of the fund to the party.

The move could deepen tensions between the Liberal Party and the Cormack Foundation in the months leading into the state election.

The Victorian Liberals hit financial strife after jailed former state director Damien Mantach stole more than $1.5 million.

The party's falling membership numbers were aired during a prior court hearing, showing they had dropped from between 18,000 and 22,000 in 1988 to 10,000 paid and 3000 pending memberships at latest count.