The fate of $13.5 million owed by concert promoter Phil Rankine’s company remains a mystery
Liquidators have looked into where $13.5m owed by one of concert promoter Phil Rankine’s companies has ended up. They’ve yet to come up with answers.
SA Business
Don't miss out on the headlines from SA Business. Followed categories will be added to My News.
- Rankine’s luxury Tranmere home on the sale block
- Prizes, discounts, freebies: Check out the latest subscriber rewards
The liquidators of one of failed concert promoter Phil Rankine’s companies has so far been unable to figure out where $13.5 million of investors’ money has gone.
And the liquidator’s report into Space Production Company questioned whether it may have been insolvent from as far back as mid-2017, although it says further investigations are needed.
Mr Rankine was previously Adelaide’s foremost concert promoter, bringing acts such as Florence and the Machine, Phil Collins and Bon Jovi to Adelaide.
But his group of companies went bust this year, with debts estimated at more than $20 million.
Investors, including a European consortium claiming to be owed about $4 million, are yet to get answers on where their money is, and Mr Rankine’s $1.5 million house was recently put on the market, with expressions of interest closing tomorrow. With a mortgage and a number of caveats over that property it is unlikely he would personally see a return from the sale.
Martin Lewis and David Kidman of KPMG say in their report into Space Production that Mr Rankine is not helping them with their inquiries, and the company’s bank accounts have no money in them.
Space Production has no assets and no cash, and “at least” $13.5 million in debts owed to unsecured creditors, the report says.
The report says Mr Rankine said the company was owed money by third parties, but “the director did not provide any further detail’’.
That money is understood to be related to an insurance claim over a cancelled Neil Diamond concert.
KPMG says the $13.5 million owed, “principally comprises funds which we understand are due to creditors who, pursuant to investor agreements, advanced monies in relation to concerts which were promoted by the company prior to our appointment, namely the Elton John concerts” held in Adelaide earlier this month.
The report says the company has not had financial reports compiled since June 30 2017.
“The director has not provided reasons for the company’s failure,’’ the report says.
“It is our preliminary view that the company failed for the following reasons:
- Trading losses within the Space Group
- High costs of capital
- Possible loans to related parties within the Space Group and the director that may or may not be recoverable, and
- Inadequate financial controls including lack of records.
“Significant further investigations are required in order to determine with certainty the reasons for, and background to, the company’s failure.
“Although our investigations are ongoing, it is possible that payments to related parties in the Space Group and to or on behalf of the director personally may result in a claim against the director for a breach of his statutory and fiduciary duties owed to the company and/or for breaches of other sections of the Act.’’
The report says the Corporations Act requires a company to prepare adequate records which must then be kept for seven years.
“The failure to maintain books and records ... provides a rebuttable presumption of insolvency ... which might be relied upon by a liquidator in an application for compensation for insolvent trading.’’
The report says that the company “is likely to have been insolvent for some time prior to our appointment as liquidators’’, noting that it had accumulated losses and a net asset deficiency of $245,000 at June 30, 2017.
“Our investigations in relation to the company’s insolvency are ongoing,’’ the report says.
The liquidators’ report says, subject to funding from creditors, KPMG will continue to trace transactions made by the company, and might consider avenues of investigation such as a public examination of Mr Rankine.
An estimate of the possible return to investors has not been given, and the liquidators said finalising the process was likely to take at least a year. Mr Rankine could not be contacted.