A major industrial employer in northern Tasmania has become the latest casualty in the growing troubles surrounding billionaire industrialist Sanjeev Gupta’s global business empire, with administrators claiming nearly $200 million was transferred out of the operation while its financial position steadily deteriorated.

The closure of the Liberty Bell Bay manganese smelter has left 214 workers without jobs and reignited debate about foreign ownership, corporate governance and the safeguards surrounding taxpayer support for strategically important industries.

According to a report prepared by restructuring firm EY Parthenon, the smelter’s financial decline was not simply the result of difficult market conditions. Administrators allege that approximately $191 million was loaned from the Tasmanian operation to other businesses within Gupta’s GFG Alliance, significantly weakening the company’s financial position over several years.

The report suggests the Bell Bay operation could have remained commercially viable had those funds remained within the business, raising fresh questions about decisions made after GFG Alliance acquired the facility from South32 in January 2021.

Liberty Bell Bay was regarded as one of Australia’s key manganese processing facilities and played an important role in Tasmania’s manufacturing sector. The plant processes manganese ore into ferroalloys used extensively in steel production, supplying both domestic and international markets.

When GFG Alliance purchased the operation, expectations were high that the business would continue operating as an important regional employer while benefiting from the group’s international steel and mining network.

Instead, administrators now say the company’s financial position deteriorated dramatically over the following four years.

Financial records cited in the report show the business generated a net profit after tax of $56 million during the 2022-23 financial year. However, that performance was followed by mounting losses totalling around $160 million before the company entered voluntary administration in March 2026.

Administrators attribute much of the decline to extensive intercompany lending throughout the wider GFG Alliance.

“Since acquisition of the Bell Bay facility from South32 in January 2021, intercompany loans have been made to various companies in the GFG Alliance,” the report stated.

The effect on the company’s balance sheet was substantial.

Working capital reportedly declined from approximately $153 million in the 2022 financial year to just $9 million by 2026, leaving the operation with increasingly limited financial flexibility despite previously being considered a profitable industrial asset.

The report also alleges that Liberty Bell Bay continued trading while insolvent from around May 2025, potentially exposing directors to significant legal scrutiny under Australia’s corporations legislation.

Under Australian law, company directors have a duty to prevent insolvent trading. If directors allow a company to continue incurring debts when there are reasonable grounds to suspect it cannot pay its obligations, regulators may investigate whether breaches of the Corporations Act have occurred.

Administrators said further investigations are required before any conclusions are reached regarding the conduct of former directors.

The report states that potential offences may ultimately warrant referral to the Australian Securities and Investments Commission (ASIC), although no formal findings have yet been made.

“Further investigations into the conduct of the former directors are required to determine whether any additional offences have occurred that may warrant reporting to ASIC,” administrators wrote.

The report adds that no assessment has yet been made regarding the former directors’ financial capacity should legal action ultimately be pursued.

Another issue attracting significant political attention concerns a taxpayer-funded assistance package provided while the company was allegedly already experiencing serious financial difficulties.

Administrators believe the smelter may already have been insolvent months before the Tasmanian Government approved a $20 million support loan intended to help secure continued operations.

According to the report, approximately $14 million from that funding was spent purchasing a shipment of manganese ore. Although the ore was delivered, it was never processed after the smelter ceased operations.

The revelation has prompted criticism from political opponents while placing renewed focus on the due diligence undertaken before public funds were committed.

Tasmanian Deputy Premier Guy Barnett defended the government’s actions, arguing officials had made every possible effort to preserve hundreds of regional manufacturing jobs.

He said governments had explored multiple rescue options, including a joint $20 million federal and state proposal announced shortly before the plant officially closed.

Mr Barnett said administrators’ findings pointed to what he described as irresponsible conduct by GFG Alliance rather than failures by the Tasmanian Government.

He also stressed that taxpayer interests remained protected through security arrangements linked to the ore inventory backing the government loan.

The collapse nevertheless represents one of Tasmania’s largest recent industrial job losses and delivers another economic blow to the Bell Bay industrial precinct, where heavy manufacturing has long been a major source of employment.

Beyond the direct loss of 214 positions, the closure is expected to affect contractors, transport companies, maintenance providers and numerous local businesses that relied on activity generated by the smelter.

For many families across northern Tasmania, the administration marks the end of a business that had provided stable, well-paid industrial employment for decades.

The report also raises operational concerns extending beyond financial management.

Administrators allege the plant suffered damage after alternative manganese ore sourced from West Africa was introduced into production processes.

According to the report, the substitute material contributed to deterioration of plant and equipment while production challenges intensified as ore shortages emerged during 2025.

At the same time, employee entitlements owed are estimated at approximately $27.9 million, highlighting the significant human and financial consequences resulting from the company’s collapse.

Administrators have formally requested repayment of the $191 million allegedly transferred from Liberty Bell Bay to other entities within GFG Alliance.

The report states that no response had been received from Mr Gupta before its publication.

A meeting of creditors is scheduled to determine whether the company should proceed into liquidation, potentially opening the next chapter in what is already becoming one of Australia’s most closely watched corporate insolvency cases.

The Bell Bay collapse is not an isolated event within Sanjeev Gupta’s business empire. Instead, it forms part of a much broader pattern of financial distress affecting several major Australian industrial assets controlled by GFG Alliance.

Gupta built an international reputation by acquiring distressed steelworks, mines and manufacturing businesses across multiple countries, promoting a strategy of revitalising industrial operations through vertical integration of mining, steelmaking and downstream manufacturing.

However, many of those businesses have faced mounting financial pressure following the collapse of Greensill Capital in 2021, which had been a major source of funding for the GFG Alliance group.

The loss of Greensill financing forced GFG to restructure debt, negotiate with creditors and seek alternative funding while a number of operations experienced increasing liquidity challenges.

In Australia, the highest-profile difficulties have centred on the Whyalla Steelworks in South Australia.

The steelworks, another cornerstone asset acquired by Gupta, entered administration after prolonged financial stress. Earlier this year the South Australian Government intervened, with restructuring specialists KordaMentha appointed to oversee operations while searching for a long-term solution.

KordaMentha has previously revealed the Whyalla operation was losing approximately $1.5 million every day, with administrators identifying a combination of operational inefficiencies, cash shortages and pricing arrangements as significant contributors to the losses.

The collapse of Liberty Bell Bay therefore reinforces growing concerns among governments and creditors regarding the financial management of GFG Alliance’s Australian businesses.

Administrators allege that substantial cash generated by profitable operations was routinely transferred throughout the wider corporate network rather than remaining available to strengthen individual businesses.

Such intercompany lending is not inherently unlawful and is commonly used within large corporate groups. However, insolvency specialists note that these arrangements become highly contentious when individual companies later fail while significant amounts remain outstanding.

If administrators ultimately establish that funds were transferred at the expense of creditors or while companies were approaching insolvency, recovery actions may be pursued through Australia’s insolvency framework.

That possibility explains why administrators have formally requested repayment of the $191 million allegedly advanced from Liberty Bell Bay to other GFG entities.

Whether any meaningful recovery is possible remains uncertain and will likely depend on the financial position of companies throughout the broader GFG Alliance structure.

For employees, however, the immediate priority is far more practical.

Workers who lost their jobs now face uncertainty over unpaid entitlements, future employment opportunities and the economic consequences for northern Tasmania.

The report estimates employee-related obligations total almost $28 million, including wages, leave and other entitlements accrued before the company’s collapse.

Australia’s Fair Entitlements Guarantee scheme may ultimately provide assistance for eligible workers if sufficient company assets cannot be realised, although the process can take considerable time while administrations and liquidations progress.

The closure also affects numerous local contractors and suppliers whose businesses depended on continued production at Bell Bay.

Manufacturing facilities of this scale typically support extensive regional supply chains, including freight operators, engineering firms, maintenance contractors, equipment suppliers and service providers.

Economic analysts have warned that the loss of a major industrial employer can have lasting consequences for regional communities, particularly where highly specialised manufacturing jobs are difficult to replace.

The political fallout is also likely to continue.

Opposition figures are expected to question whether sufficient scrutiny was applied before taxpayer funds were committed to supporting the business, particularly if administrators are ultimately correct that the company had already become insolvent before receiving government assistance.

The Tasmanian Government has maintained that its decisions were based on the information available at the time and were motivated by a desire to protect hundreds of regional jobs and preserve an important manufacturing operation.

Deputy Premier Guy Barnett has repeatedly argued that governments exhausted every realistic option to keep the smelter operating and that the administrators’ report instead highlights the conduct of GFG Alliance as the central issue.

The findings are also likely to attract close attention from federal regulators.

If administrators identify evidence suggesting insolvent trading or other breaches of directors’ duties, ASIC will ultimately determine whether formal regulatory action is warranted.

Any investigation could take months and would involve detailed examination of financial records, board decisions, cash movements and communications between directors across the wider GFG corporate group.

For now, however, the administrators’ report represents allegations rather than legal findings.

No court has determined that former directors breached Australian law, and any future proceedings would be subject to the normal legal process.

Creditors are expected to vote on the company’s future at a meeting scheduled for next week, where they will decide whether Liberty Bell Bay should move into liquidation.

If liquidation proceeds, investigators will continue examining the company’s financial affairs while attempting to recover assets for creditors, employees and other parties owed money.

The outcome will also help determine whether any funds can eventually be recovered from entities across the wider GFG Alliance.

The collapse of Liberty Bell Bay ultimately extends beyond the failure of a single industrial facility. It has become a case study in the risks associated with complex multinational corporate structures, aggressive internal financing arrangements and the challenges governments face when trying to preserve strategically important manufacturing jobs.

For Tasmania, the immediate legacy is the loss of more than 200 skilled manufacturing positions and renewed uncertainty about the future of one of the state’s significant industrial sites.

For creditors, regulators and policymakers, the administrators’ findings are likely to remain under close examination as investigations continue into one of Australia’s most significant recent corporate collapses.