Source: The Australian Financial Review, Thursday, November 14th 1996 - Trevor Sykes
Millmaster Feeds yesterday filed summons against Mr Paul Keating’s former business partner, Mr Achilles Constantinidis, claiming a total of Au$282,344 plus interest in feed bills for a piggery in the northern New South Wales town of Tamworth.
The summons was lodged in the commercial division of the supreme court of New South Wales.
Mr Keating is not a party to the action and there is no suggestion that he is involved. However, one of his colleagues, former tourism minister John Brown, is being sued by Millmaster for up to the full sum as guarantor.
Mr Keating bought a half-share in a group of piggeries in May 1991 and sold out to Mr Constantinidis in March 1994 for a profit reported to be about Au$1.8 million.
In retrospect, the deal looks fortuitous for Mr Keating, because he emerged from the business as an owner, at a profit while the original owners are facing a court action.
The total amount was originally much higher, at more than Au$1.1 million for feed bills for the Scone, Warwick and Tamworth piggeries.
However, a company named Elenium Pty Ltd, now controlled by the Soeryadjaya family of Indonesia, agreed to pay nearly Au$1 million relating to the Scone and Warwick piggeries.
Millmaster Feeds, a division of the big public company George Weston Foods Ltd, supplied feed to the Scone and Tamworth piggeries.
The ownership of the piggeries changed several times in the 1990s. Until 1991 they were jointly owned by Mr Brown and his partner, veteran Homebush meat merchant Mr Vince Hatton. The alleged debts are said to arise from an agreement between Millmaster and Brown and Hatton Rural Pty Ltd in April 1990.
The statement of claim says Millmaster agreed to supply feed to Brown and Hatton Rural, then jointly owned by Mr Brown and Mr Hatton, on the understanding that only 30 days credit would be allowed.
If the accounts became overdue, interest would be charged at the current bank rates until the account was brought within the 30 day limit again.
Millmaster claims that in October 1990 Mr Brown and Mr Hatton gave personal guarantees for all the moneys payable to it by Brown and Hatton Rural, less Au$100,000.
In May 1991, ownership of all the Brown and Hatton companies was transferred to Mr Keating and Mr Constantinidis, who became 50-50 partners in the piggery venture. Each owned half the shares in the parent company, Euphron Pty Ltd.
Although ownership of the piggery companies (including Brown and Hatton Rural) changed hands in 1991, Millmaster claims the original guarantees from Mr Brown and Mr Hatton stayed in place. The summons alleges they both agreed to renew their guarantees in March 1993 and Mr Constantinidis became a guarantor as well.
On March 7, 1994, Mr Keating sold his shares in Euphron (representing a half interest in the piggeries) to Mr Constantinidis. The Soeryadjaya family later bought into the piggeries, then got into a dispute with Mr Constantinidis which was settled by the Indonesians getting control of the Scone and Warwick piggeries while Mr Constantinidis kept Tamworth.
Millmaster alleges that the Tamworth bills were not paid and now total Au$282,344. In the week beginning May 8, Millmaster had demanded payment under the guarantees from Mr Constantinidis, Mr Brown and Mr Hatton. To date they have not complied with the demand.
Mr Brown said yesterday, “They can forget it. I have had no affiliation with the company since 1988. I have spoken to my solicitor months and months ago on this and he told me to forget it.”
Mr Constantinidis said, “The situation relating to this goes back a number of years and involves a settlement that happened earlier this year of the total of the transactions. If they (Millmaster) have taken the tack , I am disappointed but I will address it as needs be.”
Article ends.
Note Warwick is in the federal seat of Blair.
