BUSINESSMAN Rex D'Aquino's Fernbrew venture is likely to owe more than the $87 million in tax originally estimated, according to a report from the administrators.
The report from KordaMentha's Rahul Goyal and Scott Langdon, lodged with the Australian Securities and Investment Commission, said preliminary investigations into the liquor distribution company had revealed evidence it took part in transactions which could be deemed a breach of directors' duties.
The Australian Tax Office conducted an audit of Fernbrew and a related company last year and determined Fernbrew had possession or control over a number of taxable goods the second company manufactured, therefore making it liable for the debt.
The unpaid duty owing to the ATO is substantially greater than the presently assessed $87.11 million.KordaMentha administrators
The amount was the equivalent of two years' worth of tax, but the administrators believed Fernbrew had been engaging in the conduct for "at least a period of four years prior to the administration" in January.
"Meaning the unpaid duty owing to the ATO is substantially greater than the presently assessed $87.11 million," the report said.
According to the administrators, Fernbrew was solvent in the 2019 financial year "based on a strict analysis".
"In our opinion, as the unpaid duty was a liability of the company, albeit not recorded or disclosed anywhere in the financial accounts of the company, the company has been insolvent for an extended period of time," the report said.
However, the administrators said further investigations were needed to determine the precise insolvency date.
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Mr D'Aquino, the company's sole director and secretary, placed the business into administration, and it has since been placed into liquidation.
Of the debt, $7.8 million is likely to be returned by the company's clients, with almost $5.5 million already recovered.
Liquor sales have recovered $1.7 million.
Mr D'Aquino and ASIC declined to comment, while KordaMentha did not respond to a request for interview.
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