Yinhawangka Aboriginal Corporation in hands of insolvency experts

A Federal agency has put a Pilbara Aboriginal corporation that earns millions of dollars a year in mining royalties from Rio Tinto in the hands of insolvency experts over governance and financial issues.

The Registrar of Indigenous Corporations yesterday placed Yinhawangka Aboriginal Corporation, based in Paraburdoo, into special administration.

The news comes less than a week after a medical centre in Karratha being funded by YAC was forced to close when the corporation defaulted on the building’s mortgage payments.

The 300-member-plus corporation is the registered corporate native title body for the Yinhawangka people, whose land covers almost 12,000sqkm in the central Pilbara.

It derives most of its income from the Rio Tinto royalties, distributed through the Yinhawangka Trust.

In fiscal 2018 YAC received $5.7 million in distributions and agreements, compared with $2.9 million the year before. It had $1.8 million cash last June 30.

YAC’s collapse comes after a registrar examination of the corporation’s books in February identified governance and financial problems within the organisation.

They included waning trustee confidence in the corporation’s financial performance and accountability, and internal disputes that “significantly” interfered with operations and the board’s performance of duties.

The corporation was issued with a notice to “show cause” against the findings last month but the examiner was unsatisfied with its assurances.

McGrathNicol Corporate Advisory partners Michael Shanahan and Rob Brauer have been appointed joint special administrators of the corporation until August 16.

Mr Brauer said the pair would meet with corporation members over coming weeks to provide further information on the administration process.

Former YAC chairman Darren Injie said the development was “very sad” but welcomed the appointment.

Rio Tinto’s agreement with the Yinhawangka covers the Greater Paraburdoo and West Angelas iron ore mines.

A company spokeswoman said it was working with the relevant stakeholders

“We remain very supportive of YAC and will support them through this process. We are also working with the administrator and the trustee,” she said.