Kalium founder says NAIF acted as ‘shadow director’ in potash collapse
The founding director offailed potash company Kalium Lakes has asked market regulators to probe the role a federal agency played in Friday’s corporate collapse, which has put the recovery of more than $204.5 million of Australian and German taxpayer funds in serious doubt.
Former Kalium director Brent Smoothy has asked the Australian Securities and Investments Commission to investigate whether the Northern Australia Infrastructure Fund acted as a “shadow director” during the two months leading up to Friday’s collapse of the company into receivership.
NAIF and the German export finance agency KfW had effectively kept Kalium alive over the past seven months by pledging an extra $20 million of loans to give the company more time to fix processing problems at its loss-making Beyondie sulphate of potash project in Western Australia.
Brent Smoothy was only a director of Kalium Lakes but he was a major shareholder. Trevor Collens
Kalium had drawn down $15 million of that extra $20 million by June, but became insolvent on August 3 when NAIF advised it would no longer make the remaining $5 million of debt available.
Receivers from McGrathNicol are now working on a sale of the Beyondie potash asset; a process that will be heavily informed by the sale process Kalium ran over the past couple of months as it tried to solve its cashflow problems. A market filing by Kalium on July 31 suggested it had drawn down more than $83 million of loans from NAIF and more than $121.5 million of loans from KfW for a total of $204.57 million.
Mr Smoothy said he and other directors had asked NAIF and KfW to convert their debt into Kalium shares as part of a plan to foster Australia’s nascent sulphate of potash industry.
But that proposal was
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