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Failure at Scale as high-flying Collard company ordered to wind up

by Sean Johnson | Nov 23, 2023 | Business, Latest Posts

The Supreme Court of Victoria has ordered the winding up of SaniteX Global, the Scale company that employed its staff and engaged its contractors. It may well be the beginning of the end for high-flying ex-PwC partner David Collard and his battery venture. Sean Johnson of Open Politics reports.

Judicial Registrar Woronczak ordered the winding up of SaniteX Global today, despite a plea from its lawyer asking for a further adjournment. “You have provided no evidence that payment [of debt] will be made despite previous orders to do so,” the Registrar said. Geelong liquidator Scott Anderson has now been appointed to run SaniteX.

All this follows the raid of Scale Facilitation by the AFP in June over the biggest alleged tax fraud in Australian history.

Scale had established a subsidiary in Malta, with the help of PwC, to reduce its tax exposure in Australia.

Getting Scalier: David A. Collard’s creditors, lawsuits, now a thing of Scale

The Panama of the EU

Malta is known as the ‘Panama of the EU’ for a good reason. In addition to sunny weather and beaches, the island republic has the lowest corporate tax rate in the European Union, with foreign companies enjoying an effective rate of 5% if they can structure their affairs the right way.

Insiders at Scale Facilitation have told Open Politics that CEO and founder David Collard registered a company called Scale Facilitation Finance Ltd in Malta in February 2023 for the sole purpose of reducing Scale’s tax obligations in Australia, the United Kingdom, and the United States, where corporate tax rates range from 19 to 30%.

The Malta entity’s listed directors include Collard, his old school friend and Scale’s former head of external affairs Thomas Dwyer, who’s since resigned, and Maltese lawyer Jesmond Manicaro.

Manicaro is also the company secretary, a service he provides to over sixty companies.

Scale Facilitation structure

Scale Facilitation Finance structure. Source: North Data.

Collard’s establishment of Scale Facilitation Finance came a few weeks after Scale subsidiary Recharge Industries was announced as the winning bidder for Britishvolt, a collapsed lithium-ion battery startup with plans to build a £3.8B giga-factory in northern England.

PwC advice

PwC Malta advised ex-PwC partner Collard on how to structure Scale Facilitation Finance and register it with Maltese authorities. We also understand Thomas Dwyer visited Malta on several occasions to meet with local PwC staff.

What role, if any, was played by scandal-plagued PwC Australia in Collard’s decision to set up in Malta, or whether they introduced him to their colleagues at PwC Malta, is not clear.

However, we do know that a senior PwC Australia partner with expertise in international tax and transfer pricing worked for Scale under PwC’s global $3 million contract with the firm and spent time with Collard in London around the time of the Britishvolt deal and registration of the Maltese entity.

Is PwC caught up in Scale Facilitation’s alleged $150 million tax fraud?

Legality and ethics

While there is nothing illegal about Collard’s actions, or indeed those of other directors and PwC, former staff with intimate knowledge of Scale Facilitation Finance told Open Politics they were always uncomfortable with the arrangement.

So much for Collard’s claims that Scale’s planned lithium-ion giga-factories in Geelong and Northumberland would generate tax revenue, they thought.

Their discomfort only increased following the AFP raid on Scale’s Geelong offices over an alleged $76 million tax fraud involving BAS statements and claims for R&D tax offsets in 2022, although at this stage there is no evidence that Scale Facilitation Finance, which was only established in 2023, figures in the tax probe.

Nonetheless, it makes you wonder. If the allegations are proven, it’s hard not to think that an entity established solely to reduce Scale’s global tax obligations could have been destined for a central role in the alleged scheme, had the AFP not come knocking four months later.

We sought comment from David Collard, Thomas Dwyer, and PwC Australia.

Collard responded that he needed more time to digest our straightforward questions and get information from his “advisors and internal team”. This seems implausible as Collard barely has any staff left after not paying wages, while he no longer has external advisers on the books as he hasn’t paid their invoices. PwC is one of many consultants owed money.

Thomas Dwyer, whom we understand is owed significant sums of unpaid wages, work expenses and super, said in a written statement that he resigned from Scale Facilitation in October and relinquished his directorship of Scale Facilitation Finance Ltd at the same time. “I am no longer in contact with David Collard or Scale Facilitation. I’m looking forward to moving on with my life and assisting other former and adversely affected employees to do the same.”

PwC Australia did not respond.

SaniteX Global liquidation

The company was ordered into liquidation as Collard was unable to prove the company could meet its liabilities to Lake Advisory, a Geelong consulting firm owed over $100,000.

Many ex-staff would have been tuning in with popcorn because once the company was wound up they would be able to access the Federal government’s Fair Entitlement Guarantee of up to 13 weeks of unpaid pay and unpaid annual leave.

ASIC is Sick! | The West Report

 

Sean Johnson is the founder of political transparency website Open Politics and a former federal ministerial adviser and public affairs consultant.

 

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