The owner of embattled milk broking company, National Dairy Products (NDP), Tony Esposito, has defended his business practices, saying he was only trying to support farmers.
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Mr Esposito said he wanted to keep NDP afloat and did not want anyone to lose money.
“I have been trying to support farmers through a really hard time and take the hit on their behalf,” he said.
Administrators have said the primary cause of the company’s net loss was the milk prices inflated above those offered by other milk buyers that NDP paid to suppliers in financial year 2015.
“If I am guilty of anything, I am guilty of taking the lower price, giving them a better price and making it a bit more stable,” Mr Esposito said.
However his view on how NDP came into the hands of administrators has found little sympathy with the company’s farmer suppliers.
Former NDP supplier Donna Edge of Carpendeit near Colac said Mr Esposito wanted suppliers to back down on their claim for more than five cents in the dollar offered under a proposed Deed of Company Arrangement (DOCA).
“He wants us all to back down, so he can stay in business – if he really wants us to support him, he will give us all our money, plus interest.
“My overdraft is double what it should be,” Ms Edge said.
Another NDP supplier, Simpson’s Alex Robertson said some farmers were receiving less than $5 a kilogram milk solids, while the major processors were paying $5.10kg/ms.
“How does he say he was paying too much?” Mr Robertson said.
“Why did he invoice farmers for autumn /winter payments, say he would pay them and not pay?”
Mr Robertson said farmers stayed with NDP because they believed they would be paid for their milk, but Mr Esposito kept making promises he didn’t keep.
“This kept on going, every month - every month, when you questioned him on it, he just deflected it,” he said.
“All he has to do is pay us our money- he made a commitment, and he should honor it,” Mr Robertson said.
Administrators Salvatore Algeri and Glen Kanevsky have told unsecured creditors if NDP was declared insolvent, they could expect nothing, or just over a cent in the dollar.
Deloitte found the company had liabilities of $9.2 million, made up of $4.3m to unsecured creditors and a further $4.7m owed to Mr Esposito as an unsecured loan. Farmers are also owed sums of up to $1.1m in projected claims.
Others owed money are Warrnambool Cheese and Butter, $479,756, Peter Stoitse Transport, $1.35m and Tatura Milk, $197,000.
Another meeting with creditors will be held early this year. Mr Kanevsky said the time before the next meeting would allow the proponents of the DOCA an opportunity to come back with a revised offer to creditors.
It would also allow administrators the chance to investigate any potential contraventions of the Corporations Act, he said.
