Collapsed coal miner Griffin Coal is still paying fees to owner Ric Stowe despite owing staff and creditors nearly $1 billion.
According to the West Australian, Stowe’s main holding company Devereaux Holdings and Stowe Worldwide Investments Management (SWIM) was paid more than $2 million in management fees in 2010 for services to Griffin as well as its Bluewaters power stations.
"The ongoing relationships with director-related entities are all for the benefit of Griffin Coal, are commercially appropriate and at arm’s length," Griffin’s administrator, KordaMentha’s Brian McMaster said.
McMaster explained that Stowe’s companies provide sub-leasing on building spaces as well as IT services.
Devereaux and SWIM were among a number of Stowe owned companies that claimed they were owed more than $8.8 million in the wake of the Griffin Coal collapse.
The coal miner crumbled in 2009 after it was revealed that it owed about $1 billion after slowed production at the mine interrupted the cash flow needed to pay its debt’s interest.
This debt included $428 million owed to U.S. bondholders and more than $35 million in tax.
On top of this, the company made a $20 million loss in the year to 30 June, which it blamed on increasing production costs.
The miner was purchased by Indian infrastructure group Lanco Infratech late last year, however this acquisition did not include the power stations.
Due diligence is currently being carried out on the power stations and a sale is expected some time next month, the West Australian reported.
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