Replacement of Arrium administrators “disgraceful”

The removal of Arrium’s original administrators was “disgraceful” and a result of lenders acting out of their own personal interests, according to acting Mayor of Whyalla Tom Antonio.

The steel and iron ore business went into administration last week and owes its bankers $2.8 billion, trade creditors $1 billion and employees $500 million in entitlements.

Grant Thornton was originally named as administrator. However, following a push by lenders and the Australian Workers Union, the Federal Court yesterday replaced them with insolvency firm KordaMentha.

Antonio told the ABC he was surprised the union was involved and claimed lenders were looking after themselves.

“I believe Grant Thornton were doing an excellent job and they have definitely instilled confidence in the city, and they were heading in the right direction for the viability and the future of the city,” he said.

“I believe it is disgraceful, and yes I believe it’s shameful.

“If the banks have got mischief intentions behind them and if their intentions are to rape and pillage this city, then I can tell you it won’t be a good feel.”

Minister for Industry Christopher Pyne called for all parties to support the new administrator.

“The appointment of a new administrator is a decision for Arrium and its creditors. KordaMentha has a strong history of helping businesses navigate back to profitability and the Government is confident it will do all it can in the case of Arrium,” Pyne said in a statement.

South Australia’s premier Jay Weatherill said the change of administrators will cause more uncertainty for Arrium employees.