Australia

A camper trailer company in the marginal seat of Gilmore was awarded a $750,000 federal government grant at a time that it may have been trading while insolvent, Guardian Australia can reveal. The grant, awarded under the regional jobs and investment program that was subject to a scathing report from the auditor general, was given to Off Road Camping Accessories, based in the NSW south coast town of Moruya, to develop a new type of composite panel to be manufactured for camper trailers, The Guardian reported.

A subdued domestic economy and increasing risks from an uncertain global outlook have prompted Australian companies to take a cautious view of the year ahead, Bloomberg News reported. With an economy that even Australian Prime Minister Scott Morrison conceded on Monday is “soft,” new tariffs from the U.S. taking effect on around $110 billion of Chinese imports earlier this week and Brexit looming at the end of next month, not a lot of companies are optimistic about their future.

It’s turning out to be a torrid summer for the usually sedate lead market. The London Metal Exchange (LME) lead market was roiled in early June by news of an unplanned outage at the Port Pirie lead smelter in Australia, Reuters reported. It’s just been upended again by a second shutdown of the plant, which is operated by Nyrstar, the Belgian company that had to be rescued from potential insolvency by trade house Trafigura. The second outage has seen LME time-spreads tighten again and the outright three-month price hit a two-week high of $2,101.50 per tonne on Monday.

The High Court has delivered a landmark decision in prioritising employee entitlements in insolvency, irrespective of whether the company was trading in its own right or as a trustee, MyBusiness reported. Last week, the High Court dismissed an appeal in Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth of Australia and Others [2019] HCA 20. Amerind Pty Ltd became insolvent in 2014, with $21 million in debts repaid to Bendigo and Adelaide Bank, leaving a receivership surplus of about $1.6 million.

The High Court has declared it would be "perverse" not to give worker entitlements priority in any collapse, whether a company trades in its own right or as a trustee, the Australian Financial Review reported. The court's decision in the Carter Holt Harvey Woodproducts case means the same rules apply for the payment of creditors and is an important win for workers. This has been welcomed by leading insolvency practitioners, who say the status of workers employed by trading trusts has been so uncertain that they faced being pushed to the back of the queue with other unsecured creditors.

The Australian dollar dropped on Wednesday after weaker than expected inflation in the first quarter, raising expectations of a possible rate cut by the central bank. In quarter-on-quarter terms, consumer inflation was unchanged in March after a 0.5 per cent rise in the December quarter, according to the Australian Bureau of Statistics. That compared to a 0.2 per cent rise forecast by economists polled by Reuters. Consumer prices rose 1.3 per cent year on year in March, against February’s reading of 1.8 per cent. The reading was also below a Reuters poll forecasting a rise of 1.5 per cent.

Investors in collapsed Australian derivatives trader Halifax are set to have a long wait to get their money back after the administrator found "accounting irregularities" and said they will have to go to court to get a direction on how to disperse the money, The New Zealand Herald reported. Voluntary administrators Ferrier Hodgson, who were appointed in November, released an update on Halifax yesterday and said they had now undertaken a wide-scale investigation of Halifax's financial position.

Crown Resorts director and former AFL chief executive Andrew Demetriou has been grilled in court over the $145 million collapse of education group Acquire Learning, ABC News reported. Mr Demetriou was never a director of the company but was executive chairman of an advisory board and paid $75,100 a month and $1.6 million in shares for three days a week of work in an office downstairs from the directors.

A special government-appointed inquiry excoriated Australia's financial sector for misconduct on Monday, referring two dozen cases to regulators for possible legal action but leaving the structure of the country's powerful banks in place, the International New York Times reported on a Reuters story. Regulators will be subjected to a new oversight body and the financial industry's pay will be overhauled to remove conflicts of interest, according to the recommendations of the so-called Royal Commission.

Australia’s banking regulator said on Tuesday it had decided to keep the countercyclical capital buffer (CCyB) for banks on hold at zero percent, though it was considering setting a different rate in time. The Australian Prudential Regulation Authority (APRA) reviews the buffer quarterly and it has been held at zero since it started in 2016, Reuters reported. The buffer is an additional amount of capital that banks can be required to hold during periods of heightened systemic risk.