ALLEGATIONS "ghost cattle" are being mustered onto the Australian Agricultural Company's books have found their way to the Queensland Supreme Court, with the minutiae of cattle accounting now the subject of defamation action by the company's directors.
A Perth businessman, who attempted a reverse takeover of Australia's largest beef company with US agribusiness company Cargill, has accused AAco of overstating the number of cattle it owns to bolster its 2008 accounts. Donald Fuller's claims come amid rising investor discontent about AAco's purchase of Melbourne QC Allan Myers' cattle stations.
AAco chief executive Stephen Toms, acting chairman Charles Bright and non-executive directors Phillip Toyne and Brett Heading are suing Mr Fuller for defamation in relation to his claims. In a joint action filed in the Queensland Supreme Court, the AAco directors are seeking a combined $800,000 in damages, plus interest and costs.
Mr Fuller claims he led a "multibillion-dollar proposal" to buy Futuris' 43 per cent stake in AAco last year. It is believed he was proposing a tie-up between Cargill and AAco, in which he would have a $200 million stake, in return for the use of his feedlot management technology.
But in documents lodged with the Supreme Court in Brisbane last week, Mr Fuller alleges negotiations were stymied because Futuris did not want to open AAco's accounts up to scrutiny by prospective bidders.
He claims this would have revealed AAco had overstated the size of its cattle herd. "They couldn't let anyone at all near the books because they would be exposed if they did," Mr Fuller said.
Mr Fuller argues this is why Futuris decided instead to divest its AAco shareholding via deals with the Dubai-based IFFCO and Mr Myers. But IFFCO is now spearheading growing investor opposition to this deal.
Mr Fuller's affidavit goes into the complexities of cattle accounting, in which calf numbers are estimated, and then revised up or down when they are actually counted once a year. In a statement to the ASX on March 26, AAco said it had 590,382 cattle in its herd.
But in correspondence with AAco advisers Caliburn and Citi Corporate and Investment Banking filed with the court, Mr Fuller argues that "the livestock numbers cannot be reconciled with reality of year 2008 drought conditions across the region; nor with the performances of prior years".
Mr Fuller alleges in his affidavit that AAco "overstated" its 2008 stock headcount by 183,000. "I say they are, or mostly are, ghost cattle! They don't exist!" he concludes.
The company directors allege that Mr Fuller has defamed them by virtue of his comments and that their professional reputations have been damaged as a result.
AAco refused to comment on Mr Fuller's claims yesterday, as they are now the subject of legal action.
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