Top 200 Rich List (2020)No. of Dark Companies: 9
Political Donations since FY 1998-99
Rank: 143Baiada Pty Ltd (SGE)Labor Party: $0
Wealth: $724mBaiada (Tamworth) Pty Ltd (SGE)Coalition: $0
Wealth (2019): $816mBaiada Poulty Pty Limited (SGE)Independent: $0
YoY wealth change: -11.3%Tangaratta Stockfeeds Pty. Limited (SGE)Total: $0
Bartter Enterprises Pty. Limited
Bartter Farms Pty. Limited
Bartter Poultry Pty. Limited
Bartter Hatcheries Pty. Limited
Bartter Stockfeeds Pty. Limited

The Baiada family owns one of the largest poultry empires in Australia, supplying to retailers and fast-food conglomerates including Coles, Woolworths, KFC, Subway and McDonald’s. The Group, with 9 controlling entities on the Secret Rich List, processes and supplies its chicken products under the Steggles and Lilydale brands.

The Baiada empire is second only to Inghams (another Dark Group) in size after they purchased the Bartter Group in 2009, which at the time was the second-largest poultry manufacturer and supplier in Australia. Four of the family’s nine grandfathered companies are significant globals entities (see explainer below).

The Bartter acquisition brought the Steggles brand to the Baiada Group, significantly expanding its market share in the industry. For this reason, the acquisition was initially opposed by consumer watchdog the ACCC as it “would be likely to substantially lessen competition in the markets for the supply of processed chicken meat”.

However, the ACCC overturned its original decision and approved the deal on the primary condition that Baiada, upon acquiring Bartter, divested all assets currently owned by Bartter in Victoria to La Ionica Poultry Pty Ltd. The merger not only increased the family’s influence and market share but earned them an additional five Dark Companies.

The Baiada story dates back to 1916 when Celestino ‘Charlie’ Baiada emigrated to Australia from Malta when he was 14 years old. He initially worked as a kitchen hand for 15 shillings a week. By 1928, he had saved enough money to buy his first property in Pendle Hill, Western Sydney for 400 pounds. This house, which sits directly on the Great Western Highway, now operates as the empire’s innocuous head office.

Celestino continued to invest in land as he established his poultry business. The turning point came in 1940 when he won a contract with the Australian military to supply chicken products to the army. The subsequent growth saw Celestino processing 20-30 birds per week conducted in the sink at his family home. Baiada Pty Ltd was eventually established in 1963 as operating as a sole trader was no longer viable.

The Baiada Group was again investigated by the ACCC in 2011 for false advertising regarding the treatment of their chickens. A decision by the Federal Court in 2013 saw the business fined $400,000 for engaging in “false, misleading and deceptive conduct … when it described on product packaging and in advertising that its meat chickens were ‘free to roam in large barns’.” The ACCC determined that the population density of Baiada’s chickens raised in their barns and hatcheries did not allow for such movement.

In 2014, Baiada was questioned by the NSW Environmental Protection Agency, demanding an environmental audit of its chicken abattoir in Tamworth regarding an effluent spill. Baiada has also been the subject of mistreating and underpaying foreign workers and questionable development proposal strategies.

The poultry conglomerate also runs a property development operation called ‘Celestino’ which is currently developing the Sydney Science Park in Western Sydney valued at $5 billion. The family’s property development wing is controlled by one or more of their companies on the Secret Rich List. Their developments also include ‘The Gables’, “a $4 billion master-planned housing estate in Box Hill ”.

Both businesses are now held by Celestino’s six children and primarily run by his daughter Mary’s two sons John and Simon Camilleri. Another of Celestino’s daughters Therese Cordina married into the Cordina poultry empire. The Cordina family own three Dark Companies themselves, of which Therese is a director and shareholder.

According to the Australian Electoral Commission (AEC) database (dating back to 1998), the Baiada family and its extensive group of related entities, as well as prevalent board members such as George Tsekouras have not made any political donations.

ATO tax transparency data shows Baiada Poultry Pty Ltd declared an income of $10.9 billion between financial years 2013/14 to 2018/19. Over this time, their tax payable was $83.5 million, representing 29% of their taxable income.


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How we compiled the Secret Rich List

What are they trying to hide? This is the driving question behind our ‘Secret Rich List’ project at Michael West Media.

Our aim is to shine the spotlight on the 1,119 large proprietary companies that continue to enjoy a privileged exemption from having to lodge financial reports to the Australian Securities and Investments Commission (ASIC).

An exemption from any new law or regulation is commonly referred to as ‘grandfathering’. In this case, the exemption from having to lodge audited accounts effectively creates two classes of Australian citizens; large proprietary companies that have to comply with government legislation, and the remaining 1,119 companies that by definition are required to do the same, yet enjoy an antiquated free pass from full public transparency.

What was issued as a “temporary measure” by the government of Paul Keating in 1995 has placed these companies above the law for more than 25 years. We believe it is in the public interest to put an end to this outdated government legislation once and for all.

Although ASIC defines the companies enjoying the exemption as as grandfathered large proprietary companies, we prefer the term ‘Dark Companies’; it is a more fitting description of old wealth empires whose financial accounts are cloaked by this provision, shadowed from the public eye.

History behind the 1995
grandfathering exemption

This grandfathering regime was issued in response to The First Corporate Law Simplification Act 1995, a 1995 amendment to the Corporations Law at the time.

Before this amendment, whether a company had to prepare and lodge financial accounts with ASIC was determined by whether they were an exempt or non-exempt proprietary company (exempt meant the company did not have to publish accounts).

ASIC defines exempt proprietary companies as:

“companies where there was no direct or indirect public ownership; that is, they were essentially owned by private individuals. The companies were not required to lodge financial reports where those financial reports were subject to audit and sent to members.”

Simplification Act 1995 the measure of whether a company had to lodge financial accounts with ASIC changed from the reporting entity test (exempt/non-exempt system) to what became known as the ‘small/large test’.If the company was considered a ‘large’ proprietary company, then it must lodge its accounts.

 

As of the law in 1995, an Australian proprietary company was ‘large’ if it satisfied two of the following three criteria:

  • consolidated gross assets of $5 million or more;
  • consolidated gross revenue of $10 million or more;
  • the company and the entities it controls (if any)
    have more than 50 employees at the end of the financial year.

The criteria for the small/large test has since been updated.

The new legislation meant that a significant number of previously exempt organisations now had to prepare and lodge their financial accounts.

The explanatory memorandum for the Bill notes: “To avoid disrupting established commercial arrangements, those existing exempt proprietary companies which have their annual accounts audited, which are large and which elect to continue operating under the existing rules, will not need to lodge their accounts with [ASIC].”.

Thus was born the concept of the grandfathered list – or Secret Rich List as we like to call it. In 1995, it was home to more than 2,000 large proprietary companies.

Significant Global Entities

Some 12 of the 1,119 Dark Companies are considered ‘significant global entities’ (SGE). An entity becomes an SGE if it fits at least one of the two following criteria:

  • a ‘global parent entity’ whose ‘annual global income’ is A$1 billion or more,
  • a member of a group of entities consolidated (for accounting purposes) where the global parent entity has an annual global income of A$1 billion or more.

These entities must prepare and lodge general purpose financial accounts with ASIC. This requirement is no different for the 12 SGEs on the Secret Rich List as their SGE status overrides the grandfathering exemption.

MWM Methodology

Using both the ASIC and Australian Electoral Commission (AEC) databases we have conducted more than 5,000 searches and counting.

Through the ASIC searches we have been able to collate the necessary information for every company on the grandfathered list, ranging from company directors, shareholders (both persons and organisations), a company’s auditor and much more. This has all been incorporated into our database, which is designed to map out these Dark Companies and tackle our driving question.

We also used the AEC database to generate an extensive list of political donations from these Dark Companies that date from the 1998-99 financial year to the present. We have designed a separate database for these figures, listing political donations from the entity itself, its directors and/or its shareholders. Each donation has been separated into recipient categories to better display the amounts funnelled to the Liberal and Labor parties and their constituencies.

The donations help indicate why the exemption, which ensures such a lack of transparency, has stood the test of time despite numerous attempts over the years from both sides of Parliament, the cross bench, the Greens, Treasury, corporate regulator ASIC and a joint parliamentary inquiry, which have all called for the exemption to be abolished. Both databases created by Michael West Media complement each other to bolster the narrative of the stories that follow.

In a similar approach to our Q.E.D. and Revolving Doors series, we will be releasing a profile each day that highlights directors of these Dark Companies, many of whom appear on the 2020 Australian Financial Review Rich List.

The ‘Secret Rich List’ project will provide considerable evidence to shore up the next attempt to repeal the grandfathering exemption, which Independent Senator Rex Patrick is scheduled to move before the Senate in early 2021.

If you have information about this or other entries in the Secret Rich List, contact us in full confidence via ProtonMail – click here.

READ MORE LESS MORE

 

As of the law in 1995, an Australian proprietary company was ‘large’ if it satisfied two of the following three criteria:

  • consolidated gross assets of $5 million or more;
  • consolidated gross revenue of $10 million or more;
  • the company and the entities it controls (if any)
    have more than 50 employees at the end of the financial year.

The criteria for the small/large test has since been updated.

The new legislation meant that a significant number of previously exempt organisations now had to prepare and lodge their financial accounts.

The explanatory memorandum for the Bill notes: “To avoid disrupting established commercial arrangements, those existing exempt proprietary companies which have their annual accounts audited, which are large and which elect to continue operating under the existing rules, will not need to lodge their accounts with [ASIC].”.

Thus was born the concept of the grandfathered list – or Secret Rich List as we like to call it. In 1995, it was home to more than 2,000 large proprietary companies.

Significant Global Entities

Some 12 of the 1,119 Dark Companies are considered ‘significant global entities’ (SGE). An entity becomes an SGE if it fits at least one of the two following criteria:

  • a ‘global parent entity’ whose ‘annual global income’ is A$1 billion or more,
  • a member of a group of entities consolidated (for accounting purposes) where the global parent entity has an annual global income of A$1 billion or more.

These entities must prepare and lodge general purpose financial accounts with ASIC. This requirement is no different for the 12 SGEs on the Secret Rich List as their SGE status overrides the grandfathering exemption.

MWM Methodology

Using both the ASIC and Australian Electoral Commission (AEC) databases we have conducted more than 5,000 searches and counting.

Through the ASIC searches we have been able to collate the necessary information for every company on the grandfathered list, ranging from company directors, shareholders (both persons and organisations), a company’s auditor and much more. This has all been incorporated into our database, which is designed to map out these Dark Companies and tackle our driving question.

We also used the AEC database to generate an extensive list of political donations from these Dark Companies that date from the 1998-99 financial year to the present. We have designed a separate database for these figures, listing political donations from the entity itself, its directors and/or its shareholders. Each donation has been separated into recipient categories to better display the amounts funnelled to the Liberal and Labor parties and their constituencies.

The donations help indicate why the exemption, which ensures such a lack of transparency, has stood the test of time despite numerous attempts over the years from both sides of Parliament, the cross bench, the Greens, Treasury, corporate regulator ASIC and a joint parliamentary inquiry, which have all called for the exemption to be abolished. Both databases created by Michael West Media complement each other to bolster the narrative of the stories that follow.

In a similar approach to our Q.E.D. and Revolving Doors series, we will be releasing a profile each day that highlights directors of these Dark Companies, many of whom appear on the 2020 Australian Financial Review Rich List.

The ‘Secret Rich List’ project will provide considerable evidence to shore up the next attempt to repeal the grandfathering exemption, which Independent Senator Rex Patrick is scheduled to move before the Senate in early 2021.

If you have information about this or other entries in the Secret Rich List, contact us in full confidence via ProtonMail – click here.

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