Former PwC boss Luke Sayers has been re-elected president of Carlton Football Club for another year despite the ongoing furore over his former employer’s tax leaks scandal and a series of high-profile departures from his consulting firm.
Carlton members voted overwhelmingly in favour of Mr Sayers’ re-election at the club’s annual general meeting on Thursday night.
Luke Sayers to run Carlton FC for another year - Zoe Samios
No easy fix on ASIC code of conduct breaches: Jones
Assistant Treasurer Stephen Jones says he will look at warnings there is a gap in how unacceptable behaviour by statutory office holders can be dealt with, particularly among Australia’s powerful regulators.
Corporate watchdog chairman Joe Longo this month said the “gap” was a serious policy issuefor government because there were currently no consequences for commissioners breaching the code of conduct.
Assistant Treasurer Stephen Jones. Alex Ellinghausen
Mr Jones on Sunday hinted a resolution was one of dozens of issues on Treasury’s agenda and a fix was not straightforward.
“[The issue is] how do you get the right balance of ensuring [statutory office holders] can act independently without the hot breath of government on them but at the same time be held accountable for behaviour that would be unacceptable in any other workplace,” he said.
The Australian Securities and Investments Commission has been plagued by high-profile scandals in recent years, from the 2020 expense scandal that prematurely ended the tenures of former chairman James Shiptonand his deputy, Daniel Crennan, KC (both were ultimately cleared of any wrongdoing), to the conduct of former deputy chairwoman Karen Chester, and current chairman Joe Longo.
The Australian Financial Review last year revealed Ms Chester was the subject of a $140,000 investigation by law firm Seyfarth Shaw following complaints to then-treasurer Josh Frydenberg by Mr Shipton.
The outcome of the investigation was not made public and no disciplinary action was taken against Ms Chester, though Treasury secretary Steven Kennedy told Mr Longo the investigation “revealed instances of conduct regarding the standards set out in the ASIC code of conduct”, according to an extract of a letter read out in a Senate hearing.
When pressed on why no action was taken on the findings of the report, Mr Longo indicated a key issue was he had no powers to do anything in the event a breach of ASIC’s code of conduct was found to have occurred.
Mr Longo himself hit the headlines last year when the Financial Review revealed he berated a senior managerin an outburst described as highly inappropriate and crossing a line, according to people present.
Mr Longo made an “abject” apology to staff a week later, but the incident was deemed serious enough to trigger a Treasury assurance review, escalation to Treasurer Jim Chalmers and the manager’s resignation.
Former Liberal leader John Hewson weighed into the ASIC debate on the weekend, writing in the Saturday Paper that the appointment process for ASIC commissioners reflected “all the worst aspects of bad government” and should be “overhauled to ensure it is professional and independent”.
Finance Minister Katy Gallagher this month said the Albanese government was working to strengthen sanctions on public sector leaders for inappropriate conduct, but the reforms did not cover people employed under the ASIC Act, which was managed by Mr Jones.
Ronald Mizen reports on the intersection of politics, business, economics and the law from Parliament House, Canberra. Connect with Ronald on Twitter. Email Ronald at ronald.mizen@afr.com
ATO probes top construction subbie over ‘$180m tax fraud’ David Marin-Guzman
The tax office is investigating a suspected $180 million tax fraud by a top formwork contractor in the construction industry that could end up as the biggest tax fraud in Australian corporate history.
Administrators of collapsed NSW company Dalma Form Specialist have reported that the tax office alleges the firm was part of a group of 30 companies including labour hire that it suspects may have been secretly controlled by Dalma director Igor Cikes as they collapsed owing pay as you go tax over 15 years.
The alleged tax scheme has yet to be substantiated but if proven would be bigger than any previous corporate tax fraud, surpassing Plutus Payroll’s $105 million fraud and the record $135 million fraud by former EY executive Anthony Dickson.
Dalma is one of the largest formwork firms in NSW. Competitors say it repeatedly tenders prices 15 to 20 per cent below other bidders for tier-one projects, including the state government’s $476 million Victoria Cross Station development at North Sydney. Formwork involves laying the structures into which concrete is poured during construction.
The Australian Financial Review contacted Dalma about the tax fraud claims but neither the company nor Mr Cikes responded to questions sent by email. Mr Cikes’ relative and Dalma administrative officer Ivanka Cikes Dwyer said she had not heard about the claims when contacted by phone.
Jones Partners principals Bruce Gleeson and Daniel Soire were appointed as voluntary administrators of Dalma Form Specialist (DFS) late last year and confirmed the ATO had notified them about its investigation after their appointment.
Igor Cikes acted as a proxy for seven creditors during the collapse of Dalma Form Specialist.
“The ATO informed us that their investigations suggest that the company may be part of a group of over 30 companies over the past 15 years that have allegedly operated in a way to defraud the ATO of $150 million in unpaid taxes,” they said in documents filed with ASIC earlier this month.
“The ATO further alleges that Mr Igor Cikes may be a party to the alleged fraud and the ‘controlling mind’ of the group.”
Since that discussion in January, Mr Gleeson said it had been alleged the unpaid taxes “may be between $150 million and $180 million”.
Most of the companies involved in the alleged fraud, including a series of labour hire firms swapped out every two or three years, have been placed into external administration and are understood to have inadequate or poor records.
The Dalma case follows a separate investigation into an alleged tax fraud of up to $70 million involving another NSW construction firm, Titan Cranes, which is headed by Sydney Olympic FC president Damon Hanlin. Titan denies any wrongdoing or involvement in the alleged scheme.
Gerhard “Hoss” Heinrich, the founder of Queensland’s largest formwork contractor, is also being pursued by the ATO in the courts over $9.8 million in taxes left unpaid by Heinrich companies that fell into liquidation. Mr Heinrich is defending the case.
The ATO is funding Helm Advisory liquidator Stephen Hathway to investigate the Dalma group and to take control of DFS after it emerged Mr Gleeson had been the administrator of other related Dalma entities in 2010 and 2011.
Mr Gleeson said in an updated declaration of independence that he did not initially disclose his role in the former Dalma companies, whose director had been Mr Cikes’ father, as they took place more than 10 years ago.
Mr Hathway is the liquidator of two companies that allegedly formed part of the group named Admin Form and SQM Group NSW.
He said SQM appeared to have provided about 100 labour hire workers to its sole customer, Admin Form, which then appeared to have provided services to DFS.
SQM collapsed last year owing more than $7 million to the ATO in just 12 months, and Admin Form went into administration soon after.
Mr Hathway said in ASIC filings that he suspected Admin Form had shadow directors because its listed director was in India and appeared unable to provide details about the company or its work.
Helm Advisory liquidator Stephen Hathway is backed by the ATO to take charge of the investigation.
Meanwhile, Incline Hire, trading as Dalma Industries and with the same director as DFS, has taken on DFS’ business. At the same time Incline Hire acted as a DFS creditor that opposed Mr Hathway taking over as administrator by voting through its proxy, Mr Cikes.
During a DFS creditors meeting on January 12, Mr Cikes acted as proxy for seven creditors including the listed DFS director. He denied that there was any relationship between himself and DFS.
On further questioning by Mr Hathway at the meeting, Mr Cikes confirmed he had attended a meeting with Mr Gleeson, DFS’ lawyers and the DFS director that discussed the necessary steps to place the company into voluntary administration.
Mr Gleeson said Mr Cikes was representing a creditor and “took no active role in the discussions”.
Mr Gleeson, who previously unravelled fraudster Melissa Caddick’s financial affairs, said he had no conflict as he had had no communication with Mr Cikes since 2014, was not made aware of the ATO’s suspicions about Mr Cikes until after he took the role and there were no transactions with the former Dalma entities.
Jones Partners owner Bruce Gleeson previously unravelled Melissa Caddick’s financial affairs as court-appointed receiver and liquidator. James Brickwood
A resolution to remove Jones Partners and replace it with Mr Hathway as administrator was defeated due to opposition from creditors largely represented by Mr Cikes.
The ATO has advised Mr Gleeson and Mr Soire that it intends to take court action to replace them with Mr Hathway. However, no application has been filed so far and the ATO is understood to be considering its options.
Dalma has worked on major commercial, residential and government projects, often with builder Lendlease, including Barangaroo and Darling Harbour developments.
Mr Cikes, who has been in the formwork industry since 2007, says in his online social media profile that he is a director of Dalma and confirmed in creditor meetings that he was a director of Dalma Hire Pty Ltd and an employee of Dalma Services Pty Ltd.
In Jones Partners’ 91-page report back to creditors on January 30, the administrators said the DFS director told them the company had failed due to extra costs during the pandemic, inclement weather and unsuccessful contract variation negotiations.
The administrators said they had not identified any shadow directors at this stage of their investigation or been shown documentary evidence of the alleged tax fraud.
An ATO spokeswoman said the agency did not comment on ongoing investigations.
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David Marin-Guzman writes about industrial relations, workplace, policy and leadership from Sydney. Connect with David on Twitter. Email David at david.marin-guzman@afr.com