FORMER Hunter wine boss David James’s companies were unable to pay their debts from June 2011 and could have been trading insolvent from as early as 2006, reports to creditors and the Australian Securities and Investments Commission show.
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James Estate companies failed to maintain proper books and records from 2006, and Mr James repeatedly failed to respond to liquidator requests for documents after the wine empire collapsed in 2013 leaving debts of more than $25 million, liquidator Shaun Fraser of McGrathNicol in reports from 2013.
They showed employees were owed more than $790,000 and the Office of State Revenue pursued the James companies in court for unpaid payroll tax of $5.8 million.
Details of liquidator action were revealed on Thursday after the NSW Police fraud and cybercrime squad appealed to the public for information about the whereabouts of $5 million of prestige wines that vanished after the collapse.
The Granges, Henschkes and Torbrecks were held by James company Wine Investment Services on behalf of up to 300 collectors. But liquidator reports to creditors alleged the high-end wines were not stored in the carefully temperature-controlled facilities collectors paid for, but in a Homebush warehouse with “no temperature controls at all”.
The McGrathNicol reports show the liquidator contacted police after it was unable to locate the prestige wines held by Wine Investment Services. In February creditors were told ASIC was considering what action, if any, it might take after liquidator allegations that offences of the Corporations Act had occurred.
Documents show one collector has lost prestige wines valued at more than $50,000. Another has lost a wine collection valued at $32,000.
Reports to creditors said James companies’ audited financial statements between 2010 and 2012 “did not indicate any financial difficulty”, which contradicted management accounts suggesting the companies were “loss making over that period”.
McGrathNicol told creditors the Office of State Revenue was hindered from becoming aware of the nature and extent of tax defaults by the companies because it was provided with “false and misleading information and documents”.
Mr James was Hunter wine exporter of the year in 2005. He did not respond to questions.