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By Andrea Mayes
After almost three decades, Australia’s longest-running legal saga is at an end, after the West Australian Supreme Court approved the final distribution of funds to creditors of Alan Bond’s Bell Group.
The WA Government and the Australian Tax Office (ATO) are among those who will share in the spoils.
Bell Group — bought by Bond from another WA billionaire businessman Robert Holmes a Court — collapsed in 1991, and the banks who had helped prop it up reaped $280 million from the sale of its assets.
Among them were a host of major Australian banks including Westpac, NAB and the Commonwealth Bank, as well as overseas financial institutions.
But liquidators for the group began what would prove to be marathon legal proceedings against the banks in 1995, holding them liable on the grounds they should have known the dire financial situation the company was in prior to the collapse.
For years the case dragged through the courts, with hearings taking place over three years, between 2003 and 2006.
The mammoth judgement itself, which found the banks liable, spanned more than 2,500 pages and was not delivered until 2008.
Government to receive $670m
It was followed by a series of appeals and counter appeals over the following years until 2013, when the banks finally agreed to settle, leaving a pool of about $1.75 billion to be distributed among creditors.
These included the WA Government, which held a large stake in Bell Group through its third party insurance arm SGIC, thanks to a deal struck by then-premier Brian Burke.
It is set to receive about $670 million.
Others to receive settlements include the ATO.
Legal fees alone are estimated to have cost the WA Government at least $300 million.
Treasurer watches from gallery
In December last year the court reached the settlement over the distribution of the funds, which received final approval on Thursday by the Supreme Court.
Justice Jenni Hill told the court the case had been the subject of “extensive and significant publicity” and congratulated the parties for “reaching the final resolution of a matter that has been going on for at least 30 years.”
Treasurer Ben Wyatt was among a small group of spectators in the public gallery of the court for Thursday’s hearing.
Outside court he said he was reluctant to “assume this is over” before the Government actually received the money it was owed “because as we know, this has been an ongoing saga”.
“Anything can happen and what the litigation has shown over the years is that this is something (where) you can never assume a conclusion, so until that money is paid I’ll certainly remain anxious about that outcome,” Mr Wyatt said.
“I’m just pleased that we’re hopefully very, very close to seeing this thing finally complete and the taxpayers of WA no longer funding what has been a ridiculously long piece of litigation.”
The final disbursement is due on September 11.
Dark days of WA Inc
The wrapping up of the Bell Group litigation marks the end of the fallout resulting from what was known as the WA Inc years, when the state government entered into a series of questionable dealings with business leaders including Bond, former head of the failed Rothwells Bank Laurie Connell and casino developer Dallas Dempster.
The infamous political scandal led to a royal commission in 1991 and the estimated loss of close to $900 million in WA taxpayer funds.
Former premier Brian Burke was jailed for rorting his travel expenses during WA Inc — although his conviction for stealing Labor Party campaign funds was overturned on appeal — while his predecessor Ray O’Connor was also imprisoned for his fraudulent WA Inc-era activities.
Bond himself was jailed on three separate occasions relating to his corrupt business dealings, which included siphoning $1.2 billion from Bell Resources to Bond Corporation.
‘Unholy mess’ of Bell Group
Financial commentator Tim Treadgold described the Bell saga as “an unholy mess”.
“The key point is that government got into business when it shouldn’t have,” he said.
“Governments are not in the business of business — and they thought they were.”
He said the WA Government had wanted to gain control of Bell Resources and Bond Corporation, in order to gain a stake in BHP.
“What they found was the person they got into business with, Alan Bond, was not as honest as he might have appeared,” Mr Treadgold said.
“Then they discovered there was a massive inconsistency in the accounts, massive debt, and the whole thing unravelled, leaving the taxpayers of WA to foot the bill, which they have footed for the best part of 20 years.”
Mr Treadgold said the total cost to the taxpayer was “incalculable” and the $670 million would “not go anywhere close” to what it had cost over the decades.
“Hopefully it’s WA Inc laid to rest with a silver stake through its heart,” he said.
However, he said he was not sure government had learned its lesson.
“I think government still sees itself as being a player in business, and that is the fundamental mistake which we continue to make,” he said.