Aspiring mine and rail developer Adani says a harrowing diagnosis from one of Australia’s top forensic accountants is “uninformed” and “inaccurate,” and the company is not at risk of financial ruin.
Adani’s proposed Carmichael coal mine and rail project in the Galilee Basin is perhaps the most controversial of its kind in recent history. The plethora of environmental, economic and employment factors at play have been debated in the nation’s newspapers, shouted about in Central Queensland’s oldest towns, and discussed across dinner tables around the nation for more than half a decade.
But all that controversy could be moot, according to Sandra van der Laan, a forensic accountant from the University of Sydney.
“[Adani Australia] looks to me like a corporate collapse waiting to happen,” van der Laan told the ABC last week. “It has all the hallmarks of the big corporate failures we’ve seen over the last 20 to 30 years.”
Van der Laan, one of the few experts who predicted the collapse of childcare major ABC Learning in 2008, told the ABC the ‘labyrinthian’ structure of Adani’s Australian business “seems to be developed to obfuscate or confuse or to hide things”.
Her analysis indicated the current assets of Adani Mining, the Australian registered business which reported to ASIC on March 31, were less than $30 million. Current liabilities due over the next 12 months come to more than $1.8 billion, van der Laan said.
“Adani Mining is in a very fragile, even perilous, financial position,” she was quoted as saying. “The gap between current assets and liabilities is what’s really concerning. Effectively on paper they are insolvent. I wouldn’t be trading with them, as simple as that. I wouldn’t have anything to do with them.”
Adani on July 24 dismissed the report, and labelled van der Laan’s commentary as “false and misleading”.
“Just like every mining project, our project will not generate income until the mine and rail are built and operating and coal can be sold and exported. Until we start producing and selling coal, we will be continuing to invest in the development of the mine and rail and therefore this will be treated as an accounting loss,” a spokesperson said.
“With Adani’s approvals for construction now in place, construction on the Carmichael mine and rail project is progressing well. The construction stage is due for completion approximately two years after approvals were received, and production of coal will shortly follow.
“The investment in the delivery of the Carmichael Project was always expected to be a long-term investment, which is why Adani has remained committed to the Project.
“Already Adani’s businesses in Australia have had major impacts on the Queensland economy, through its ownership and operation of Abbot Point Port Terminal, Adani Renewables’ solar farm in Rugby Run, and now with the delivery of the Carmichael Project.
“Adani looks forward to continuing its operations and the significant financial contribution it makes to the Australian economy over the coming years.
”We expect anti-coal activists will continue their attempts to discredit and misrepresent our organisation and operations. Despite this we will deliver our Carmichael Project and the benefits it will bring to regional Queensland communities.”
Adani also criticised the Institute for Economics and Financial Analysis (IEEFA), an advocate for renewable energy development which republished van der Laan’s comments.
“IEEFA is well-known for publishing alarmist papers that attempt to discredit the fossil fuel industry using flawed analysis in order to achieve its state aim of transitioning to renewable energy,” Adani Mining said.