The appointment of a voluntary administrator to the Superfert Dongbu Company serves as a timely reminder to farmers about the risks associated with paying for goods and services in advance.
The fertiliser company recently went into voluntary administration and the situation has left many farmers out of pocket.
WAFarmers CEO Stephen Brown said the unfortunate situation is a cautionary tale for other farmers.
“Payment as a deposit or payment in advance potentially leaves the payer totally exposed in the event that the business they are dealing with becomes insolvent or enters administration,” Mr Brown said.
Mr Brown acknowledged that saving a few hundred or a few thousand dollars would be an attractive offer, particularly in the current market, but advised farmers to purchase with care.
“Making a payment for tens or hundreds of thousands of dollars only to later see the company enter administration can be financially devastating,” Mr Brown said.
Bailiwick Legal Director Phil Brunner advised that any person or business paying partially or wholly for goods and services in advance should seek to minimise risk.
“Risk can be minimised by obtaining a security interest in the goods or services, registering the security interest on the PPSA Register or demanding that their funds are placed into a trust account,” Mr Brunner said.
WAFarmers has actively sought details on the Superfert administration and, with Phil Brunner, is assisting members that have been affected. For further information contact the WAFarmers office on (08) 9486 2100.
All media requests to be directed to WAFarmers Media and Communications Officer Sophie Kilby on (08) 9486 2100 or [email protected].