Sam Mitchell’s WealthCheck traded for nine years ‘while insolvent’

Would-be cattle baron Sam Mitchell’s WealthCheck allegedly traded while insolvent for about nine years, with an audit revealing missing cars and huge cash transfers before its collapse.

WealthCheck boss Sam Mitchell at his Californian home.

Would-be cattle baron Sam Mitchell’s key company allegedly traded while insolvent for almost nine years, a liquidators report has warned, with an audit of his company’s accounts revealing missing cars and huge cash transactions leading up to its collapse.

In a report filed by insolvency accountants SV Partners, liquidators have questioned why a number of transactions were made in the months before the collapse of his agricultural deal-making firm WealthCheck Management in June after demands from the tax office.

Mr Mitchell made a name for himself in agricultural circles over a series of high-profile bids for huge cattle and cropping properties across the country in recent years, including fighting it out for retailing billionaire Brett Blundy and media magnate Harold Mitchell’s assets.

However, Mr Mitchell has also left a trail of aggrieved creditors and clients in his wake, with documents showing the list of failed businesses, including a Sydney baking operation.

The latest report into Mr Mitchell’s company, founded by the Bondi businessman in 2005, alleges WealthCheck was insolvent from at least mid-2015, years before an earlier estimate that it was broke from around 2018.

In a report to creditors, SV Partners alleges WealthCheck owes at least $6.2m to creditors, with the agricultural operation collapsing with just $2736 in cash at the bank. The total tally from creditors across Mr Mitchell’s business interests is far higher, with several companies within the WealthCheck orbit remaining operational and under his control.

The Australian is aware of several creditors who have sought to make claims against WealthCheck management only to discover their costs had been marked up against another company controlled by Mr Mitchell.

WealthCheck boss Sam Mitchell.

He is also facing a cash call from lenders, with Hong Kong investment house ADM Capital pursuing the former banana bread baker over loans extended to several agricultural interests.

ADM Capital is set to front up against lawyers for Mr Mitchell in the NSW Supreme Court on Friday, as the lender pursues him over $US38m ($58m) lent over several agricultural deals.

Set against its $6.2m in debts, the liquidators report shows WealthCheck had just $4.1m in assets of which almost $2.5m was from trade debtors.

However, many of these debtors are related parties to Mr Mitchell, with some also under administration with liquidators warning it was “unlikely” to be collected.

The latest liquidators report shows that despite its emptying accounts, Mr Mitchell spent at least $192,351 on “personal transactions” from WealthCheck’s accounts. This was in addition to a further $199,550 lent to a key company controlled by Mr Mitchell in addition to $2198 sent to an American company controlled by him.

At its collapse, Mr Mitchell’s company owed $4.25m to the Australian Taxation Office and current and former employees for unpaid superannuation.

SV Partners note WealthCheck’s accounts also do not detail almost $230,626 in transactions that remain outstanding.

The liquidators have also raised questions about a number of vehicles owned by Mr Mitchell’s company, noting several have not been recovered or were sold and the funds cannot be located. In addition they questioned the ownership of a Toyota Landcruiser which Mr Mitchell “advised he is not aware of”.

Liquidators also questioned what happened to the money from the sale of a Kubota M108 tractor, which was “sold prior to the appointment of the former administrator”.

“We have requested the director provide us with copies of documentation relating to these sales, including the sale price realised and evidence of payment of these funds into the company’s bank account,” the liquidators said.

They warn Mr Mitchell may have committed at least four potential breaches of the corporations act – continuing to trade while insolvent, failure to act with a degree of care and diligence, failure to act in good faith and for a proper purpose, as well as improper use of position and/or information to gain an advantage to the detriment of the company.

“Depending on our ongoing investigations into the above offences, these will be reported to ASIC along with any other identified offences, in a confidential report,” they wrote.

SV Partners said they were concerned Mr Mitchell failed to maintain statutory taxation obligations, as well as noting records show he may have “have breached his duty by improperly using his position to gain an advantage for himself”.

They note almost $289,000 transferred from the company to trade creditors in the six months prior to appointment, warning they may also constitute voidable transactions.

Mr Mitchell did not respond to requests for comment.

Originally published as Sam Mitchell’s WealthCheck traded for nine years ‘while insolvent’