Government of Western Australia Perth Market Authority MINISTERS OFFICE

31 July 2015

The Hon. Ken Baston MLC Minister for Agriculture and Food; Fisheries, 7th Floor, Dumas House, 2 Havelock Street WEST PERTH WA 6005

Dear Minister,

4l-tR~\.Jo <' 3 AUG 2015

RECEIVED

I 1 .

." ' " ARKETCITY The centre of freshness .

We refer to the recent decision by the government to proceed with the sale of the assets and undertakings of the Perth Market Authority. We refer also to your Second Directive dated 17/07/2015 which we have considered and accepted.

Please be advised that the Board will provide full cooperation to the government in the sales process.

We wish to advise that Mr Grant Etherington will resign effective immediately due to emerging issues of conflict.

In order that the current Board is able to assist we have agreed to remain in place until 31 December 2015 and will step down on that date. During the interim period we will continue where possible under the provisions of our Act to maintain the operations of the PMA while also being subject to your Second Directive.

Our last formal Board meeting and subcommittee meetings will be held during December 2015.

We thank you for the privilege of serving as Board Members of the Authority during its 89th year and wish the government every success with the pending sale process.

Yours sincerely

Ermie Robinson Director

GrntfkJ~ D' ector

J,c:;:?

~~ GlenMews Director

Perth Market Authority Mail Point 1, Market City, 280 Bannister Road,

Canning Vale. Western Australia 6155 T: 08 9456 9200 F: 08 9456 9222

E: pma@perthmarket.com.au W: www.perthmarket.com.au ABN 74807 298 316

Hon Ken Baston MLC Minister for Agriculture and Food; Fisheries

Our ref: 47-08366

Mr David L. Thomas Chair Perth Market Authority Mail Point 1, Market City 280 Bannister Rd CANNING VALE WA 6155

~ De~s PERTH MARKET AUTHORITY

Thank for your reply dated 31 July 2015 to my letter regarding the second Ministerial Direction related to the Perth Market Authority Direction 2015 NO.2.

I would like to acknowledge the constructive and professional approach to your duties that the Board of the Perth Market Authority (PMA) have taken with the sale of the PMA assets and operations.

However at this point in time it is not possible to say with absolute certainty when there will no longer be a requirement for your services as the Board. It may well be the case that your services will be required for some period of time in 2016 to allow for an orderly transition to the new entity. I trust that if this is the case I can call on your goodwill to assist in this process.

I would also like to thank the Board for their oversight of the PMA and the successful growth in the fresh food market operation in both income and profit that has occurred.

Yours sincerely

KEN BASTON MLC MINISTER FOR AGRICULTURE AND FOOD

12 AUG 2015

Level 7, Dumas House, 2 Havelocl< Street, West Perth, Western Australia 6005 Telephone: +61 865525400 Facsimile: +61 8 6552 5401 Email: Minister.Baston@dpc.wa.gov.au

• ..1 • ,~ M\ 3 .

__ Government of Western Australia Perth Market Authority

MARKET CITY 7 September 2015

The Hon. Ken Baston MLC Minister for Agriculture and Food; Fisheries, 7th Floor, Dumas House 2 Havelock Street WEST PERTH WA 6005

Dear Minister,

The centre of freshness.

Re: Sale of the Assets and Undertakings of the Perth Market Authority (PMA)

I refer to our recent correspondence regarding the arrangements for the governance of the PMA during the current sale process and transition of ownership to the private sector.

At its August meeting the Board considered this correspondence and has requested that I write to you and convey the Board's position on the following matters.

1. Tenure of the current board and transition arrangements

As you are aware the current Board is now operating in caretaker mode, having resigned effective 31 December 2015. At its August meeting the Board considered your recent letter appealing to the goodwill of the board and suggesting that it may be necessary for the current board members to remain in place for a further period .

The Board believes it has shown a great deal of goodwill in managing the affairs of the PMA professionally during a time of significant uncertainty since the announcement of the asset sales in 2014 and in remaining as Directors until 31 December 2015. Accordingly the Board wishes me to confirm that the current resignations remain in place and effective from 31 December.

During the interim period to December (4 months) the Board will be happy to assist in the transfer of governance to a new board or to an alternative interim administrator as the government may see fit.

2. Indemnity

The Board wishes to advise that it has considered the revised draft of the proposed Indemnity from the Treasurer in the context of the Board's legal advice and that all Directors have elected to decline the offer of the Indemnity from the Treasurer.

3. Executive Key Person Retention Incentive payments

I recently wrote advising of the Board's endorsement of a proposal from the PMA CEO to enable the PMA to provide retention incentive payments to certain critical staff members as an incentive to encourage them to stay in critical functions during the transition to new ownership.

This matter has now been outstanding for some weeks and the Board is now concerned that unless the government provides its consent to this (or a similar) proposal, the capacity to maintain operations of the PMA on a business as usual basis is at significant risk.

Accordingly, the Board seeks the urgent attention of the government on this matter so that the CEO may make arrangements to support the retention of key staff during the transition to private ownership.

4. Facilitation of detailed due diligence and inspections of PMA assets by Treasury, its contractors and other parties

The CEO wrote to you on Friday 4 September expressing a number of concerns relating to the safety and tenant liaison issues arising from requests from Treasury to provide access to PMA

buildings and tenant's premises.

At its August meeting the Board also expressed concerns regarding the ongoing impact on the time of the CEO in meetings, hosting visits, collating information and answering queries from Treasury and its contractors. At the current time this is averaging 2 full days a week and is compromising the capacity of the CEO to maintain his core function in maintaining the market, as is required under our Act. The pressure on the CEO is exacerbated by the recent resignations of both the General Manager and the Chief Financial Officer.

Accordingly the Board has asked me to relay its concerns to you and to request that Treasury provide a permanent on site senior resource that is charged with coordinating all information transfers, marketing and due diligence activities related to the sale. The CEO has recently written to Treasury with suggestions to facilitate this through the appointment of Treasury as an inducted contractor on site, which will assist Treasury and its contractors in progressing the sale process with less impact on PMA staff.

Yours Sincerely,

~ :;, <2 Q---., David L. Thomas Chair

CC: PMA Board Directors

Perth Market Authority Mail Point 1 , Market City, 280 Bannister Road,

Canning Vale, Western Australia 6155 T: 08 9456 9200 F: 08 9456 9222

E: pma@perthmarkel.com.au W: www.perthmarkel.com.au ABN 74 807 298 316

rd'l E-MAILED LC-J 2 S OCT Z015

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---- --.. ---.--------------------"~,~. ~~-~.,---.~.-~---.---

Hon Ken Baston MLC Minister for Agriculture and Food; Fisheries

Mr David Thomas Chair, Perth Market Authority MP 1 Market City 280 Bannister Road CANNING VALE WA 6155

~ Dear~as

BOARD ARRANGEMENTS TO SUPPORT SALE OF THE PERTH MARKETS

I am writing to you as Chairman of the Perth Market Authority (PMA) Board, and through you to all current members of the Board.

As you're aware, the original timing for the sale of the Perth Markets was for finalisation in early 2016, with signing of a sale contract taking place prior to Christmas 2015. In accordance with this timeline the PMA Board gave notice of its members' intention to resign effective 31 December 2015.

As it stands the sale process has progressed to the stage of preferred bidders; however, it's apparent that a contract will not be signed by Christmas this year. Therefore, given that the process has been delayed slightly a Board will need to remain in place beyond the end of the year to see it through to completion.

As per your discussions with my office, it's appropriate then to allow an interim Board to be appointed now, which can operate beyond the current members' resignation date of 31 December this year until the sale process is complete. Consequently, I would ask that you and the current Board members bring forward your resignations effective 31 October to make way for an interim Board. Your written confirmation of this would be appreciated.

I would like to take this opportunity to thank you for your role as Chairman these last eight years along with the current Board members. Together you have done an outstanding job in managing an important part of the fruit and vegetable supply chain for the people of Western Australia.

I would also like to thank you and the Board for the professional way it has handled the sale process during the past 12 months. I have every confidence that the work you have done in the . past will provide a solid foundation for the new owners to take the Markets forward into the future.

Yours sincerely

Ken Baston MLC MINISTER FOR AGRICULTURE AND FOOD

17 OCT 2015 ..

7th Floor, Dumas House, 2 Havelock Street, West Perth, Western Australia 6005 Telephone: +61 865525400 Facsimile: +61 865525401 Email: Minister.Baston@dpc.wa.gov.au

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m!: _ Government of Western Australia ~ Perth Market Authority

I

Aft , MARKET CITY

30 October 2015

The Hon. Ken Baston MLC Minister for Agriculture and Food; Fisheries, 7th Floor, Dumas House 2 Havelock Street WEST PERTH WA 6005

Dear Minister

Ollie centre oi ·freshlJess .

Re: Perth Market Authority - Board Resignation

Thank you for your letter of 27 October 2015 requesting Members bring forward their resignation from 31 December 2015 to 31 October 2015 to allow the appointment of an interim Board to give effect to the sale of assets and dissolution of the Authority.

The Members of the Perth Market Authority wish to advise you that they accede to your request to bring forward their resignation. However in view of the fact that the new Board is not yet in place and in order to preserve the continuity of the legal entity, in keeping with good Corporate

. Governance practice, the Members have resolved to remain in place until 27 November 2015 or the appointment of the new Board whichever is the sooner.

The Board will be happy to brief the incoming Members at your convenience.

Yours sincerely,

David L. Thomas Chair

Vasilios Gotsis Director

~ . -~~ Glenn Mews Director

Ermie Robinson Director

~~ Director

Perth Market Authority Mail Point 1, Market City, 280 Bannister Road,

Canning Vale, Western Australia 6155 T: 08 9456 9200 F: 08 9456 9222

E: pma@perthmarket.com.au W: www.perthmarket.com.au ABN 74 807 298 316

Ralfe, Anthea

From: Sent: To: Subject:

D'sa, Bernadine Monday, 2 November 2015 2:19 PM Baston, Minister TRIM: FW: Confidential: Briefing from outgoing chair of the PMA

From: David Thomas [mailto:d.thomas@chartwconsult.com] Sent: Sunday, 1 November 2015 1:47 PM To: D'sa; Bernadine Cc: Morgan, Luke; Ferdinands, Vernon; Whittington, Trevor; Ermie Robinson; Glen Mews; Basil Gotsis; Diane Fry; Nicole Fernandes; Stephen Ward; Rob Delane Subject: Fwd: Confidential: Briefing from outgoing chair of the PMA

Dear Bernadine,

At its meeting on Friday 30 October, the outgoing Board of the PMA (copied) moved a resolution requesting me to forward my email of 25th October (below) to the Minister for his information and noting. It may also be useful in briefing the incoming Board of the PMA. Please can you provide it to the Minister at your convenience.

Thank you and best regards,

David Thomas

Begin forwarded message:

From: David Thomas I Chartwell <d.thomas@chartwconsult.com> Subject: Confidential: Briefing from outgoing chair of the PMA Date: 25 October 20151:12:56 pm AWST To: Rob Delane <Rob.Delane@agric.wa.gov.au>, jane.wedgwood@treasurv.gov.wa, Trevor Whittington <trevor.whittington@dpc.wa.gov.au>, Mal Wauchope <MAL.WAUCHOPE@psc.wa.gov.au> Cc: Stephen Ward <sward@perthmarket.com.au>

Dear Rob, Jane, Trevor and Mal,

PMA Board - Transitional Summary

I am writing some summary thoughts to you as key senior stakeholders - which may assist in the transitional arrangements to be put in place to govern the PMA over coming months prior to its proposed dissolution. As you are aware, in order to provide a fresh governance framework to facilitate the pending sale of the PMA's assets, it is likely that the current board of the PMA will accede to the proposition put to us over the last week that it should bring forward it's resignation from 31 December to now become effective on from the close of business on Friday 30 October. We will consider this matter at our board meeting on Friday 30 October.

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I am travelling for most of the coming week so thought that it would be best to send a brief note now. For continuity and reference I am also copying the current CEO Mr Stephen Ward and will table this note to the PMA board meeting next week.

1. For the record

I've received some feedback which suggests that some stakeholders have fOlmed the view that the sales process is somehow being impeded by the actions of the board and the CEO.

I respectfully advise that the Board and the CEO have cooperated with the Task Force in every way lawfully possible under the terms of our Act and in full compliance with the Minister's Second Directive. I am advised by the CEO that the PMA has provided every item of information requested by the Task Force to date and that the PMA has detailed logged records recording this systematic information exchange -which now runs to volumes ofinfOlmation and many hours of meetings. We have also been providing the Minister and Treasury with our board minutes which provide full transparency on our decisions.

At the most recent meeting with the Treasury Task Force I suggested that the Task Force and its advisors should establish a permanent team based at the PMA to seek whatever information it required to assist in the sales due diligence process, and that the CEO would make himself available for regular meetings (daily if necessary) to clarify or provide guidance on questions that have arisen.

If the sales process is delayed this is not due to any actions on the part of the Board or the CEO.

The CUlTent Board advised the Minister in July that we will stay in place until the end ofthis year to provide stability of governance and to assist with the transition. We have been maintaining this cOlmnitment.

Clearly - when the current enabling legislation before Parliament becomes law - the Treasurer and the Minisister will have a wider range of lawful options to deal with the governance, sale and transition of the asset ownership - including the creation of interim administrative structures. Until that time the fi:amework of the CUll'ent Act applies and we have been cooperating as fully as possible within this framework.

For the record I wish to repeat again that the current PMA Board understands that the Government is the owner of the assets and has decided to sell them. The Board and CEO have been providing every lawful assistance possible to assist the sales process, whilst also being focussed on maintaining the functionality and value of the PMA business during a period of significant uncel1ainty for the organisation. Further - as evidenced by the most recent independent stakeholder satisfaction survey, the board and management have delivered the highest ever levels of customer satisfaction during this difficult period. So - objectively - we have been doing an outstanding job in maintaining the value of the asset as a going concern.

2. Finances

As you will be aware, the most recent Annual RepOlt as at June 2015 records a strong balance sheet, low gearing and ample liquidity. The September 2015 management accounts indicate a further improved position - including net assets of$158 m at September 2015 and a CUlTent cash position of$6.54 million. The Auditor General's audit outcome for FY2014 was also clean. In recent years the PMA has also applied a strong internal audit process and the most recent of these found no matters of a material nature. I am pleased to be leaving the PMA in a sound financial position. We have also been able to systematically improve the infrastructure of the PMA, including bring the whole site to CUlTent compliance requirements for fire safety - entirely within the current capital constraints of government and without any draw on consolidated revenue.

I am aware that the CEO has mentioned capital maintenance items that will require attention by the new owners in the medium term, and which are a function of the fact that the capital infrastructure on the site is now over 25 years old. These items include such areas as the roads and hardstands, the electricity feed in

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infi:astructure and the many roller doors on the site. The CEO will be able to brief the incoming board as required.

3. Management

Over the last few months the CEO and I have been consistent in warning of the vulnerability of the management function and this has been a big matter of concern to the cunent board. CUlTently, in addition to the CEO, there are only two other senior executives at the PMA who has continuity of senior executive function and knowledge (these are the Communication and Marketing Manager Nicole Femandes and the Acting CFO Rike Lie ). The acting CFO is about to go on maternity leave and I understand that the CEO has last week appointed a contractor to fill this position for the duration of the matemity leave. The General Manager position is vacant. I therefore reconunend that the incoming board place a high priority on supporting the CEO in this area - particularly to maintain value of the asset and the continuity of services to clients and stakeholders during the sale process. A key part of this will be to accelerate the current review of the proposed retention incentives for key strategic roles.

4. Industry Development and Support

With the support of the Director General ofDAFWA and the Chamber - the PMA has developed and supported the Great Green Grocer ("GGG") program and funding is committed through to June 2016. However, if the PMA is dissolved prior to this date there will need to be suitable transitional arrangements to manage the outgoing PMA obligations to the GGG program for the period to 30 June. The cunent PMA CEO and Marketing and Communication Manager also provide critical steerage of the GGG on a day to day basis and the transitional arrangements need to maintain this management input. There is also the question of whether the government should support the GGG for a further year by withholding some of the sale proceeds in a trust arrangement. The CEO is the best person to provide a briefing around the detail on this matter.

The cunent PMA board has also placed a priority on holding regular visits to regional areas of W A to meet with growers and other supply chain stakeholders in the fresh produce sector. I would recommend a transitional strategy to provide communication and 0ppoltunity for input to and from regional stakeholders over the ownership transition period.

Kind regards,

David Thomas

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Hon Ken Baston MLC Minister for Agriculture and Food; Fisheries

Our ref: 47-09113

Mr David Thomas Chair Perth Market Authority Mail Point 1, Market City 280 Bannister Road CANNING VALE WA 6155

~ DearM~as PERTH MARKET AUTHORITY BOARD RESIGNATIONS

Thank you for your letter dated 30 October 2015 regarding the resignations of members of the Perth Market Authority (PMA) Board.

I accept the Board members' resignations and appreciate them being brought forward to facilitate the sale process of Market City. My Office and the Department of Agriculture and Food Western Australia (DAFWA) are making arrangements to appoint a new, interim Board that will see the sale process through to completion. As part of this process, I am very happy to accept your offer of a briefing for the members of the new Board. Your detailed understanding of the PMA and its operations will be very useful in assisting the new Board fulfil its obligations under the Perth Market Act 1926. My Office will be in touch with you to make the necessary arrangements.

I would also like to take this opportunity to thank you and the other Board members for the hard work that has ensured Market City's success, and for the professional way in which you have conducted yourselves during the sale process.

Yours sincerely

KEN BASTON MLC MINISTER FOR AGRICULTURE AND FOOD

2 6 NOV 2015

Level 7, Dumas House, 2 Havelock Street, West Perth, Western Australia 6005 Telephone: +61 86552 5400 Facsimile: +61 8 6552 5401 Email: Minister.Baston@dpc.wa.gov.au