Baillieu linked to mine debacle

Thursday, November 9, 2006

Originally published at: 

LIBERAL Party leader Ted Baillieu has been linked to one of Victoria's most damaging environmental debacles through his shareholding in a collapsed mining company.

The company, Denehurst, went bust in 1998, leaving the state government with a $6.9million clean-up bill at the Benambra Mine, in Victoria's far east.

News of Mr Baillieu's involvement in the Denehurst mine comes as he tries to shake off suggestions his $3.8 million share portfolio would leave him hopelessly compromised if he were elected premier on November 25.

The ALP said yesterday the Denehurst shareholding posed a fresh problem for Mr Baillieu because a future government might decide to pursue damages from the Denehurst administrator, PricewaterhouseCoopers.

Energy and Resources Minister Theo Theophanous said Mr Baillieu would have to absent himself from cabinet deliberations over pursuing the missing money, and his shareholding would put the responsible minister in an impossible position.

"I wouldn't like to be in the position of taking a plan to cabinet to seek the outstanding money knowing my premier had shares in the company," Mr Theophanous said.

"If it did go to cabinet, any cabinet member who had a financial interest in the company that's being pursued would have to absent themselves."

A future government might also have to decide on applications from firms keen to reopen the mine amid rising metal prices.

But administrator Michael Fung said there was no way the Government could recoup the money for the clean-up from the administrator, and that Denehurst's shareholders were not liable under the laws governing listed companies.

East Gippsland independent MP Craig Ingram said Denehurst had left the Benambra mine littered with equipment and potentially hazardous materials, including a dam full of tailings laced with lead, zinc and copper.

Mr Baillieu - who has been under fire over his refusal to place his portfolio of more than 40 stocks into a blind trust - declined to comment on his stake in Denehurst.

He continued to insist yesterday he had no conflicts of interest, saying he had dealt with his shareholding in a transparent way. "I welcome the scrutiny. I think there should be transparency, and I'm more than happy to have that scrutinised," he said.

"I've gone the extra step of distancing myself from the decision-making in a perfectly standard and traditional way. What some don't seem to understand is that there isn't an option to not disclose under the Victorian legislation."

But the Liberal leader refused to say if his portfolio was being administered by Mutual Trust, a company established by the Baillieu family to look after its financial interests. He rejected suggestions the lawyer advising him over conflict-of-interest issues is his brother Ian, but refused to name the lawyer involved or to release the legal advice saying a blind trust would be inappropriate in Victoria.

Peter Costello backed Mr Baillieu yesterday over the controversy surrounding his portfolio. "He has taken his decision and he has taken it after advice and so I support his decision," the federal Treasurer said.

Denehurst was involved in another costly debacle in NSW. It owned the Woodlawn goldmine at Goulburn, in the state's southeast, which shut when the company collapsed in 1998, leaving 175 workers out of a job and owing $5 million in entitlements.