A collapsed agricultural company set up by former News Corp chief Ken Cowley, which boasts News Corp as a shareholder, owes the federal government $9 million over a failed carbon farming venture.

RM Williams Agricultural Holdings, which was chaired by Mr Cowley, had attempted to establish the world's largest carbon farm on Henbury Station in central Australia in 2011.

How the Financial Review reported the story on May 31.

The company obtained $9 million from the federal Environment Department's Caring for the Country program to buy the 500,000 hectare property, about 230 kilometres south of Alice Springs. But before the carbon operation could be established, RMWAH went into receivership, owing tens of millions of dollars to a series of high-profile creditors including Westpac, which had provided finance, and News Corp, which had invested in shares in the company.

On Monday the Environment Department confirmed that the recipient of the funding had to repay the money even though the company was in receivership.