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Jon Adgemis’ former chief financial officer has told a court about the severe financial stress of running businesses which the failed pub baron used to fund a lavish lifestyle in the lead-up to the $1.8 billion collapse of his hospitality empire.
Alexander Andruska, a Woollahra councillor who worked with Adgemis since 2012, told a Federal Court examination into his former boss’s financial affairs that it was a “complete mystery” what happened to money invested in the former KPMG partner’s Public Hospitality Group.
Adgemis declared bankruptcy last October owing $1.8 billion to creditors. Lawyers for liquidators BRI Ferrier are currently hearing evidence from a string of witnesses related to his companies.
Andruska’s evidence painted a picture of a tangled web of businesses, under near constant financial stress, but where Adgemis used funds to maintain a lavish lifestyle.
“It was always under financial stress because Jon would always overcommit … he had an exorbitant lifestyle that he had to maintain,” Andruska said.
He said that Adgemis had “absolutely” used his group of companies to continue funding that lifestyle, which included buying a yacht once owned by Shirley Temple and a string of luxury cars which have since been sold to pay off his creditors.
“A lot of it was dealing with one disaster after another,” Andruska said of managing the finances of Adgemis’ companies
Andruska, who was recently employed as a staffer for Liberal senator Andrew Bragg, said that trying to find out where all the money went was a “thankless job”.
“It was very stressful. I wanted to bloody blow my brains out,” he told the court. He also said that the stress had manifested in “depression and excessive drinking”.
“Jon had a reputation as the worst communicator in Sydney,” Andruska said.
“What Jon would do was have these information silos. Everyone would have a little of the picture, but nobody would have it in its entirety,” he said.
This week’s hearings have revealed where at least some of that money came from. The court heard that the Australian Taxation Office was examining around $1 billion in spending as part of an alleged sham tax scheme, where one of Adgemis’ businesses, JAGA Group Constructions, had received $77 million in GST refunds.
Andruska said the GST refunds were essential to the continued running of Adgemis’ businesses.
“I do not think the company would have been able to trade at all but for the $77 million,” he said.