The Grounds cafe empire avoids $1.6m tax debt after liquidations
Insta-famous cafe empire The Grounds, owned by Ramzey Choker (pictured) and Jack Hanna, has repaid only a tiny portion of a $1.6 million tax debt.
NSW
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Insta-famous cafe empire The Grounds repaid less than seven cents in the dollar of a $1.6 million tax debt, yet authorities have ignored recommendations to launch an investigation into its owners.
Liquidators have completed their examination of four companies that were used to run uber popular eateries, The Grounds of Alexandria and The Grounds of the City, which were placed into administration under the weight of more than $2 million in debts.
But their reports into the failed companies paint a picture nowhere near as pretty as the artistically styled dishes served at the glamorous eateries, which are famous for their extravagant fit-outs.
Of the four liquidated companies, the best result for the creditors — the biggest being the Australian Taxation Office — was a return of seven cents in the dollar.
One other company returned four cents in the dollar while two others returned nothing.
This means that from the more than $2 million in debts the companies clocked up in the three years to 2018, only $35,105 was recovered.
Yet both restaurants continue to trade because their operations have been transferred to other companies.
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The liquidators from accountancy firm Setter Shepard recommended in their reports that The Grounds owners, Ramzey Choker and Jack Hanna, be investigated for a range of corporate breaches, which could see them banned from acting as company directors.
They also made three requests to the ATO to conduct a public examination where Mr Choker and Mr Hanna would be grilled on the situation.
Mr Choker did not respond to questions emailed on Saturday, while Mr Hanna could not be reached.
But all of these requests were rejected by ASIC and the ATO.
And both agencies refuse to reveal their reasoning as to why the decisions were made.
When questioned about the situation, an ASIC spokeswoman said: “I can’t comment in relation to this particular matter.”
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A spokeswoman for the ATO was similarly brief in response to questions as to why it would not fund a public examination.
“The ATO cannot comment on the tax affairs of any individual or entity due to our obligations of confidentiality under the law,” the ATO spokeswoman said.
Yet in a two-year period, when the companies were hitting the financial iceberg, Mr Choker and his business partner Jack Hanna were paid six-figure wages from at least one of the companies, according to the liquidator’s reports filed with ASIC.
In 2017 and 2018, Mr Choker and Mr Hanna were paid a combined $703,195 by the operation and were likely further remunerated by other arms of the business, the reports said.
Mr Choker also lives in a waterfront eastern suburbs apartment and was pictured in February driving a Mercedes AMG G-63, which has a price tag starting at $148,000.
The latest set of liquidations takes the tally failed businesses used to run The Grounds operations to seven.
It also takes the total value of tax the companies have failed to pay to the ATO and the Office of State Revenue to more than $3 million.
Three other companies used to operate the business were placed into the hands of administrators from 2014 after racking up debts of more than $4 million.