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Australia’s most successful indigenous financial conglomerate, Centrecorp, controls assets of more than $100 million; little evidence of spending on beneficiaries

Posted by gasweek on 3 October, 2007

A key figure in Australia’s most successful indigenous financial conglomerate, Centrecorp, was a co-shareholder in one of its largest investments, L. J. Hooker in Alice Springs, according to The Age (21/8/2007, p. 4).

Centrecorp’s assets of over $100 million a surprise: Centrecorp Aboriginal Investment Corporation was meant to act on behalf of its beneficiaries, the indigenous people of central Australia, who were among the nation’s poorest. But there was little evidence of the business empire – which controls assets with an estimated worth of more than $100 million – spending much on its 18,000 beneficiaries. The Age had been told that a number of key Aboriginal groups had been surprised by the extent of Centrecorp’s assets and business dealings revealed in the newspaper on 20 August. They were planning to ask Centrecorp directors for an explanation of how profits were being distributed.

Kennedy denies any conflict of interest: Robert Kennedy, who worked in the property industry before becoming Centrecorp’s company secretary, had a one-third stake in Magnetic Pty Ltd. Centrecorp owned the rest of Magnetic, the company that owned half of L. J. Hooker in Alice Springs. Kennedy, who had held the Magnetic shares for 13 years, denied any conflict of interest in a statement yesterday. “At the time Centrecorp acquired Magnetic Pty Ltd, corporate law required a minimum of two shareholders. I agreed to hold the share as bare trustee for Centrecorp,” he said. He said he received no money from his role with Magnetic. Kennedy, 67, was a key figure in Centrecorp, acting as a company secretary and director for 17 companies related to it.

Centrecorp shares Peter Kittle Motors and Yeperenye property portfolio: Besides its L. J. Hooker investment, Centrecorp owned a range of interests, including a half share in Peter Kittle Motors, a business rated by BRW magazine in 2006 as the fastest growing in the Northern Territory. That business had revenue of more than $90 million and a gross profit of $13.8 million. Centrecorp also owned 60 per cent of the Yeperenye property portfolio, which had an estimated worth of more than $50 million, and rental income of $6 million to $8 million. Centrecorp directors had not disputed these figures.

Centrecorp accused of secrecy: Other investments include the Adelaide to Darwin railway, a gas pipeline through northern Australia and a tourist resort near Uluru. Centrecorp’s 60 per cent shareholder was the powerful indigenous body the Central Land Council, with Tangentyere Council and Congress Health its other investors. Created in 1985 with “donated” funds and income from the Amadeus Basin gas pipeline, it had been accused by local indigenous beneficiaries of secrecy and lack of spending on projects in Alice Springs.

The Age, 21/8/2007, p. 4

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