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.
Asked if he wanted to keep NDP afloat, he replied:
“Absolutely, I don’t want anyone losing any money, I have been trying to support farmers through a really hard time and take the hit on their behalf,” Mr Esposito said.
“If I am guilty of anything, I am guilty of taking the lower price and giving them a better price and making it a bit more stable.”
Administrators have told unsecured creditors they could expect as little as five cents in the dollar, under a deed of company arrangement (DOCA).
Joint and several 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
Among those owed substantial amounts of money include Warrnambool Cheese and Butter (WCB), $479,756 and Peter Stoitse Transport, $1.35m and Tatura Milk, $197,000.
Farmers are also owed sums of up to $1.1m, in projected claims.
Mr Esposito said he was being painted “as a thief.”
“I am no thief,” he said.
“I have never done the wrong thing by the farmers, I have always supported them, and I have done exactly the same thing, and all this happens.
“I was taking the hit on their behalf, so it could be more sustainable.”
Mr Esposito said he would have to “wait and see” what happened.
“I don’t want no-one to miss out on any money, but I don’t want to be put through this, and my business stripped off me for helping, how’s that fair?”
He said little had been mentioned about how NDP had paid a higher market rate, than processors.
“We were paying them in excess of $5 (kg/ms) we were taking the losses because we knew the market would come back.
“I was happy to take the loss, it keeps them sustainable.”
The milk price had never stayed as low as it had, for such a long time.
“It’s now been recovering, for the last few months, and the returns have been great, but we are not there to receive those returns now, that’s the sad part about it.”
He questioned concerns raised by Gippsland farmers, the Plants, saying NDP had helped their business to grow.
“How did they earn the extra money to grow ?,” Mr Esposito said.
“Who did they earn the extra money from, it didn’t come off a tree.”
But when asked about the claim, former NDP employee Daryl Cardona said the Plants would have been well ahead, if they had gone with another company.
“If Plants supplied Bega, Parmalat or Lion, over the last ten years, they'd be hundreds of thousands of dollars ahead and relatively line ball with Fonterra or MG," Mr Cardona said.
Carpendeit farmer Donna Edge said Mr Esposito had never phoned her.
“He said he was going to look after us, and he didn’t,” Ms Edge said.
“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.”
And Simpson’s Alex Robertson said some farmers were receiving less than $5kg/ms from NDP, 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.”
A second creditors meeting was held in Melbourne, in late December, with another to be held early this year.
“This is to allow proponents of the Deed of Company Arrangement (DOCA) an opportunity to revise their initial proposal for further consideration by creditors when the meeting is reconvened early next year and also to allow the Administrators time to undertake some further investigations in relation to potential contraventions of the Corporations Act,” Mr Kanevsky said.
No date has been set for the next creditors meeting.