Jon Adgemis accused of $300m tax bill in secret ATO briefings
Liquidators are tracing allegations of ‘improper, unsubstantiated, and potentially fraudulent’ GST credit claims which are the subject of ATO audit and investigation.
The Australian Taxation Office has been internally briefed about a ballooning tax bill of Sydney pub baron Jon Adgemis which some sources alleged could be $300m.
Documents seen by The Australian show the tax office is circling at least 27 companies associated with the former pub baron, as allegations surface of “improper, unsubstantiated, and potentially fraudulent GST credit claims ... now subjects of an ATO audit and investigation”.
Liquidators for four companies previously controlled by Mr Adgemis made the allegations in an initial assessment of several of his companies.
A spokesman for Mr Adgemis denied his tax affairs were improper or fraudulent.
“The allegations by liquidators, as they relate to GST and the ATO, are denied. These claims are the subject of the group’s ongoing dealings with the ATO,” he said.
At his peak, Mr Adgemis controlled an empire of more than 22 pubs and hotels across Sydney and Melbourne, assembled with private credit funding.
The former KPMG deal-maker once touted plans to float his Public Hospitality Group in a deal valuing the pubs business in excess of $470m.
But a blowout in borrowing costs coupled with a downturn in trading defeated his vision of controlling a listed hospitality empire.
Several venues purchased by Mr Adgemis languished after being gutted for renovation, with building works delayed and incomplete.
Documents seen by The Australian suggest the ATO is now considering how to pursue hundreds of millions allegedly owed across companies controlled by or previously linked to the businessman.
Mr Adgemis is also staring down a potential bankruptcy with debts exceeding $1.5bn.
Sources alleged the GST credit claims detailed in liquidator reports may reflect refunds provided by the ATO to companies controlled by Mr Adgemis, when invoices for services had been provided but allegedly not paid.
A 10 per cent GST levy is paid on transactions, with a potential $300m tax bill suggesting claims against up to $3bn in turnover.
The Australian is not suggesting Mr Adgemis has committed fraud, only that liquidators allege concerns over GST refunds.
A BRI Ferrier liquidators report for the Strand Operating Co, a company previously controlled by Mr Adgemis, reveals it previously billed another company controlled by the pub baron before later reversing the transaction.
The report noted the Strand Operating Co’s accounts showed only one transaction, an invoice to JAGA Group Constructions, another Adgemis business. This invoice was issued in January 2022 to cover development rights of the Exchange Hotel in Sydney’s Balmain.
However, the accounts showed more than two years later, in August 2024, this invoice was reversed.
The tax office was thought to be owed $162m based on its correspondence with Mr Adgemis’s bankruptcy trustee WLP Restructuring.
The ATO, which declined to comment, recently issued a tax alert detailing its concerns about improper GST refunds and fraud in the construction and pub sector, set to be the subject of the Serious Financial Crime Taskforce.
The tax office highlighted it was examining fake consulting and management agreements, where companies seek GST refunds despite invoices never being paid.
The ATO recently took aim at embattled pub business the Virtical Group, which allegedly made false claims for GST in excess of $100m used to fund the purchase of major venues including Melbourne’s Adelphi Hotel and Sydney’s Republic Hotel.
The tax office also imposed a fine against Virtical Group’s boss John Palasty personally over his attempt to block the ATO’s audits.
BRI Ferrier notes it has discussed its four companies under liquidation with Public Hospitality Group’s former chief financial officer Alexander Andruska, but has been unable to get clear information from Mr Adgemis who has failed to provide a statement to liquidators.
The report notes one company under liquidation, JAGA Medical Supplies, was set up to import medical consumables during the pandemic, however records show the business was established in January 2022.
BRI Ferrier cannot find any bank accounts operated by several of the companies or any management accounts.
Much of the potential $300m in tax debts detailed in tax office records tied to Mr Adgemis belong to two companies.
Both have been placed into administration under Balance Insolvency managing partner Timothy Cook.
Mr Cook, who notes “optimal results are achieved for all stakeholders” on his website, was appointed to seven companies previously controlled by Mr Adgemis in June.
This came after Olvera Advisory approached the Sydney liquidator.
Olvera Advisory is run by former Climate 200 whisperer Damien Hodgkinson.
Separately, Mr Hodgkinson attempted to stymie journalists seeking to ask the former pub baron questions at a dramatic August 1 meeting with creditors where Mr Adgemis’s rescue proposal was put on ice amid the intervention of the bankruptcy regulator, the Australian Financial Security Authority.
Mr Cook told creditors he had a “casual acquaintance” relationship with Olvera Advisors which “does not result in a conflict of interest or duty”.
BRI Ferrier replaced Mr Cook as liquidators of Public Kitchen, but notes Mr Cook has yet to provide a “full transfer” of the files.
More Coverage
