The HWE board has appointed Anthony McGrath, Scott Kershaw, Joseph Hayes and Shaun Fraser of McGrath Nicol & Partners as replacements.

 

The company's fall into the hands of administrators followed the surprise withdrawal of Swiss trader Glencore from a financial rescue plan over the weekend.

 

Both Ernst & Young and McGrath Nicol & Partners remained tight-lipped about the situation, dispatching brief statements.

 

"The complexity of the group and limited timeframe surrounding the appointment was such that closer examination by the firm suggested a potential conflict of interest that could have jeopardised its independence," Ernst & Young said.

 

"Accordingly the firm has resigned from the appointment."

 

A spokesperson for McGrath Nicol said it was "stabilising the business" and would soon communicate with key stakeholders ahead of the first creditors meeting next Tuesday.

 

According to Euroz Securities analyst Steve Suleski, it was surprising, but not unheard of, for an administrator to resign. "Administrators can resign for a number of reasons," he told CEN.

 

"It's not like they go in and say I don't like it and pull out. It's more likely that they were appointed by the board, usually very quickly, and reviewed the contracts etc, and someone has realised there was some previous relationship somewhere. They could have done some tax or audit work for them.

 

"I'm not sure what the conflict was, but I wouldn't read too much into it."

 

HWE appointed an administrator after Glencore Finance AG pulled out of a $100 million recapitaliation plan, which offered the contractor a financial lifeline and some security to shareholders.

 

But the deal was dependent on a numerous conditions, which it appeared HWE was not going to meet, Suleski said.

 

"They (Glencore) haven't officially said (why they pulled out), but their deal was conditional," he said. "One thing was for HWE to find further financing facilities.

 

"Glencore was only part of the solution, HWE had to do the second half. Usually when a company needs financing to continue, providing half the money isn't a solution. You need to fully fund the plan to meet your objectives."

 

HWE shares have been suspended from trading.