The professional body that represents “treasury and financial risk management professionals” at some of Australia’s largest banks and companies has collapsed into administration with debts of $150,000. The Finance & Treasury Association, which is based in Melbourne, was placed in the hands of administrator Andrew McLellan of insolvency firm PPB late on 18 June, following a decision by the FTA board, led by chairman Axel Blom.
McLellan says it is “not a big job” by insolvency standards. Debts total $150,000 and there are no secured creditors. SmartCompany is a creditor of the collapsed association.
McLellan says the FTA has $39,000 in cash in the bank and is owed $37,000 by credit card company American Express. Its only other asset is goodwill, which McLellan says includes a membership database with about 860 members and the right to conduct events with these members.
McLellan says the FTA’s big annual congress event, which was due to be held in October, will now be postponed.
However, McLellan will try to sell the membership database and right to hold events. He says is he is reasonably confident of getting a deal away and getting a return for creditors.
“Worst case scenario you get nothing, but you don’t have to get too much for the creditors to even get 100c a dollar,” McLellan says.
The administrator says it is too early to say why the FTA has collapsed.
“The CEO left recently. They are still trying to piece together how they’ve ended up in this position.”
But chairman Axel Blom says the organisation has suffered in the last 12 months as the credit crunch has ripped through the financial sector. The administrator says membership has fallen by about 20% over the last year.
“The FTA like any other organisation is suffering from the global financial crisis.”
Blom says two SME-focused events held in May, for which SmartCompany was an advertising partner, also contributed to the outcome.
Both events fell well short of expected attendance levels and former FTA chief executive Judy Hartcher left the organisation shortly after the events were held.
SmartCompany publisher Amanda Gome says she would never have entered into an advertising arrangement with the FTA if she had known they were in such financial strife.
“It is a very difficult environment to hold events,” she says. “But the CEO Judy Hartcher was very experienced in the SME sector having been the SME spokesperson at the CPA. She also was very experienced at holding events and was not only confident the event would work but that the FTA would make a large profit. When it was clear the FTA was not going to get the numbers they hoped for, we organised some more speakers to try and help them out. That in the end attracted more attendees, but obviously not enough to save the organisation.”
Judy Hartcher did not return calls before publication.
Former director Kevin Smout, who is also a partner with accounting firm KPMG in Perth says he resigned from the FTA in late April and thinks members will be “disappointed and shocked” to hear that an organisation focused on risk management has itself fallen into financial trouble.
But he did give an insight into the nature of running a not-for-profit professional association.
“The organisation has always been a not-for-profit and has never been run with large amounts of retained earnings. At one stage there was money in the bank and the members had complained that there should be lower fees.”
The first meeting for creditors will be held on 30 June in Melbourne.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
