SIMON Read of McGrath Nicol, Great Southern’s receiver, yesterday told investors the group was insolvent and a review of the viability of each project would take up to seven weeks.
Once this was done, Mr Read will decide to either wind up the project or appoint a new manager. “If a scheme is viable, there is at least the theoretical prospect that the solvency issue can be resolved via the financing of a new responsible entity,” he said.
Investors who borrowed to finance their investment are still obliged to make repayments with little prospect of seeing a return. In more bad news, some learned yesterday that they might be forced to pay back the tax deduction they claimed, according to the The Australian Financial Review .
For investors in the 2008 Renewable Fibre Project, tax deductions might be clawed back by the Tax Office, as the trees were not planted before June 30, as required to claim the deduction. “The receivers are in discussions with the ATO in respect to this matter,” he said.
The ATO said it was “considering the tax implications for the participants that may flow from the potential non-completion of establishment services for certain forestry projects, such as the failure to plant trees”.
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