RTC wound up after years in legal limbo
The signs bearing the Rural Traders Company logo were once a common sight in many country towns, taking their place alongside other agribusinesses such as Landmark and Elders.
But now RTC has wound up, after 14 years in legal limbo.
RTC directors dissolved the company in Perth last Thursday, after a legal dispute over a company lease concluded, allowing the company to be terminated.
The WA-based company, started in 1972, was once considered a premier rural business entity.
But seven years later, fear of the millennium bug and intervention by government regulators sowed five years of turmoil and $26 million in losses.
The Y2K nervousness was blamed as the starting point of a string of bad luck for the already debt-ridden co-operative after it reported it was unable to communicate its financial position to regulators because of a system failure of its supposed 2000-proof accounting system.
The declaration created significant uncertainty as to whether the company had sufficient cash or financing arrangements to settle its liabilities, and was later followed by an Australian Securities and Investment Commission decision preventing RTC from any longer taking farmers’ deposits.
RTC posted a net loss of $6.37 million in the full year to December 1999 and said its overdue accounts for the 12 months to December 2000 would show a further loss of $13.2 million in the 2000 calendar year, compared with a net loss of $6.37 million in 1999.
By 2004, the company was no longer trading and had paid back its farmer investors with $15 million proceeds from the “fire sale” of its Milne Feeds, Clover Meats, Mt Barker Chicken businesses, as well as a wool broking operation.
Former RTC director Graham Laitt said the “conspiracy of circumstances” amounted to a “missed opportunity” for shareholders.
Mr Laitt, who claims to have lost $4.5 million from RTC, said he had put the failure behind him.
“I had a vision of making RTC a marketing enterprise, and due to some terrible luck that didn’t happen,” he said.
“Since then other people involved and I have gone on and done things differently, and some of us have been very successful.”
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