Billionaire Jo Horgan’s Mecca under investigation by ASIC; secretive retail empire pushed for more disclosure

Beauty empire Mecca's $1.36bn parent company has operated in the shadows for years until an ASIC inquiry forced its disclosure, casting the Mecca universe in new light. The regulator says large private companies cannot evade their reporting obligations.

Billionaire Jo Horgan’s cosmetics giant Mecca is being investigated by Australia’s corporate cop for possible breaches of its financial reporting duties, after new disclosures revealed the existence of a secret parent company atop the beauty empire.

Mecca Brands — already a $1.3bn company and one of the country’s leading retailers — went public this week with its connection to an even more profitable and previously unknown parent, RTCH, after discussions with the Australian Securities and Investments Commission and Mecca’s auditor, PwC.

It provides a truer picture of how the privately owned business functions and formalises a pecking order where its successful retailing arm is just one spoke in a more elaborate picture.

“ASIC is investigating entities within the Mecca Group regarding their compliance with financial reporting obligations,” an ASIC spokeswoman told The Australian.

Jo Horgan and husband Peter Wetenhall own Mecca. Picture: Robbie Fimmano

“ASIC has recently indicated a broader crackdown on the financial reporting of large proprietary companies. ASIC will use its full range of enforcement and compliance tools in response to non-lodgement (and any other financial reporting issues identified).”

The Mecca empire is controlled by Ms Horgan and her husband Peter Wetenhall but has largely been protected from public view as they decline outside capital, having grown it from a single store.

A company spokeswoman said Mecca has “always been a privately owned Australian business”.

“As we’ve grown, we’ve become subject to additional reporting requirements. Each year our accounts have been audited before being lodged with ASIC, though we acknowledge they haven’t always been filed on time,” she said.

“We have been in recent communication with ASIC about these matters and, together with our auditors, have taken steps to address them.”

Mecca’s retail arm, Mecca Brands, reported sales of $1.28bn for the 2024 calendar year, and a 20 per cent slide in profit to $22.7m. It was a small bump from $1.2bn reported for 2023, but does not include the benefit of its new Melbourne megastore which opened last month.

According to those accounts, no dividends were paid to the company’s directors Ms Horgan or co-chief executive Mr Wetenhall for two financial years.

But accounts for Mecca Brands’ parent, RTCH, cast the Meccaverse in new light. It reported larger revenue of $1.36bn, and a profit of $111m.

Jubilant scenes at the Bourke St’s flagship grand opening. Picture: Wayne Taylor

RTCH accounts for the 2022, 2023 and 2024 financial years revealed more than $200m worth of dividends were declared, including $110m last year.

This $110m dividend was reinvested back into the company, not pocketed by its owners, Mecca said this week.

Two other related companies, Mecca Distribution and Mecca IP, join Mecca Brands as wholly owned subsidiaries of RTCH. It appears that RTCH has always been Mecca’s parent company.

RTCH had been lodging its accounts but only via Melbourne-based accountant Philip Ibbotson who is listed as the sole director, making it virtually undetectable as Mecca’s money box.

Mr Ibbotson is a partner of accounting and tax firm Ibbotson & Moscatelli and specialises in strategic tax and management consultancy and restructuring.

“Providing advice on complex capital gains tax issues has been a rewarding aspect of this type of work and I have assisted many clients achieve great tax results,” his business profile says.

Some early media reports on Mecca and Ms Horgan, who started the business in 1997, describe Mr Ibbotson as a board member of the then-fledgling business, but formal paperwork only lists him as a company director of Mecca Brands in 2006 and 2007.

Mecca’s spokeswoman said Ibbotson has been Mecca’s accountant and long-term adviser for more than 30 years.

For the year to December 2024, RTCH booked revenue of $1.36bn compared with Mecca Brands’ $1.28bn. In the same year, RTCH’s profit was $111m compared with Mecca Brands’ $22m.

And for the year to December 2023, RTCH reported revenue of $1.28bn compared with Mecca Brands’ $1.21bn. RTCH earned a profit of $128m compared with Mecca Brands’ $27m.

RTCH hit the billion-dollar watermark in 2022 when revenue soared to $1.03bn from $720m, while Mecca Brands reported $971m in turnover.

ASIC has been cracking down on the reporting habits of large private companies, including those owned by billionaire members of The List - Australia’s Richest 250 who are compelled to lodge financial reports for the first time in decades.

The inner workings and business dealings of some of Australia most successful families and entrepreneurs had previously been exempt from lodging annual financial reports with the regulator under what was meant to be a temporary plan put in place by the Keating government in 1995.

Artful touches inside Mecca’s new temple. Picture: Hugh Davies

That loophole was closed by federal parliament in 2022 with hundreds of so-called “grandfathered large proprietary companies” having their exemptions withdrawn.

ASIC has been vocal about its campaign to level the disclosure playing field.

It said last month there had been “high levels of non-compliance by previously grandfathered companies”, which prompted the corporate regulator to increase its intensity of reviews and launch the broader crackdown.

This extended to surveillance of large proprietary companies like Mecca, which ASIC expects to complete in the first quarter of 2026.

“We will continue to monitor and address lodgement failures, including taking regulatory action when needed,” ASIC Commissioner Kate O’Rourke said.

Under section 292 of the Corporations Act, all disclosing companies - defined as generating $50m or more in revenue, having at least $25m worth of assets and more than 100 employees - need to prepare their financial report each year.

Section 319 requires the company to lodge this report within four months of their balance date. Mecca Brands has regularly been late, but is closing the gap.

As well, auditors are required by section 311 to dob in their clients for breaches.

If the matter goes to court and a company is successfully sued, the maximum civil penalty for companies is the greater of 50,000 units (currently $16.5m), three times the benefit obtained and detriment avoided, or 10 per cent of annual turnover, capped at 2.5 million penalty units ($825m).

Originally published as Billionaire Jo Horgan’s Mecca under investigation by ASIC; secretive retail empire pushed for more disclosure