After failed revival bid, Gold Coast firm Ozz Investments goes to the wall with $10.2m in debts
A long-troubled Gold Coast financial services outfit has crashed, owing over $10 million, despite efforts to revive it.
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FAILED REVIVAL
A long-troubled Gold Coast financial services outfit has collapsed despite efforts to revive it earlier this year.
Creditors last week voted to pull the plug on Robina-based Ozz Investments, which went to the wall owing $10.24 million.
The firm, which made business loans, invested in property and supplied private equity, had fallen into administration in February.
But those owed money voted for a “deed of company arrangement’’ in March. That allowed the co-directors, South African expats Steve van Tonder and Giliam Scott, to stay in control and keep trading in order to repay just $2.77 million to creditors.
Then-administrator Glenn O’Kearney had urged approval of the DOCA, which would have returned about 25 cents in the dollar, as a better option than liquidation.
Under the deal, Ozz committed to making three payments between May this year and May 2021.
Yet the arrangement quickly came unstuck after the directors missed the first instalment of $470,000. They formally requested a delay in June despite being in breach of the terms.
With no hope of righting the ship, creditors tipped the company into liquidation and tapped O’Kearney to clean up the mess since he had already been acting as administrator.
COMING UNSTUCK
Ozz was launched in 2001 by van Tonder, a mad-keen rugby fan who had emigrated Down Under after serving on various South African agricultural boards.
The company made small business loans ranging from $50,000 to $500,000, provided mezzanine financing to property developers nationwide and got involved in private equity investments. There were also plans to launch a funds management arm.
But in a detailed report to creditors, O’Kearney found that Ozz had lost substantial amounts of money in all but one year since 2015. He further alleged that the company “may have been trading while insolvent for almost a year’’ before it fell over.
The directors blamed “a mismatch of yields’’ and flawed investments for creating cash flow problems. That prompted creditors to issue statutory demands for payment and increased the threat of a wind-up bid in court, the report said.
In one case, Ozz agreed to cough up $550,000 to a creditor in November 2018. But when the final tranche of $250,000 went unpaid by May last year, a statutory demand followed the next month, O’Kearney found.
By April last year Ozz was unable to pay back numerous investors whose money had been loaned out, the report said. They joined solicitors and the tax man, who had also been knocking on the door for payment since 2018.
O’Kearney did not respond to a request for comment on Monday. But he has previously estimated that creditors may be able to claw back up to 22c in the dollar under a liquidation scenario.
Neither van Tonder nor Scott could be contacted. These gents and several of their related parties have sought to recover nearly $1.55 million from the wreckage.
Previously, van Tonder pocketed $840,000 from the sale of his Hope Island home in mid-2018, property records show.
Meanwhile, an effort to personally bankrupt Scott failed last week when the Federal Court in Brisbane dismissed an application brought by one of the investors.
BOOK BONANZA
Who would have thunk it?
Despite our screen-obsessed culture, sales of old-fashioned books surged during lockdown.
E-commerce group Booktopia revealed on Monday that it saw a 28 per cent spike in new book sales during the last financial year as sales exceeded $165 million.
The company, launched by entrepreneur Tony Nash in 2004, sold more than 6.4 million titles in the year to June 30, shipping about 30,000 every day.
Notably, trade spiked measurably in the second half as plenty of us worked from home.
Booktopia, which acquired rival Angus & Robertson in 2015, raised $20 million earlier this year as it aims to grab a bigger slice of Australia’s $2.5 billion book market.