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Paris-based Richard Chiu, who once owned Old Sydney Town and whose group says it owns 55 hotels across five continents, has been served with a summons.
Paris-based Richard Chiu, who founded Warwick Hotels and Resorts in 1980 and whose group says it owns 55 hotels across five continents, has been served with a summons to appear over both the entire $20m proceeds of the 2018 sale, and more than $5m that a liquidator says is owed to the Australian Taxation Office.
Mr Chiu’s global hotel empire was launched with the purchase of Warwick New York which, the company’s website says, was “built by early 20th-century media tycoon William Randolph Hearst for the love of his life, actress Marion Davies’’.
Old Sydney Town closed in 2003 after almost 30 years of operation.
Mr Chiu was associated with Old Sydney Town on the NSW Central Coast since the early 1980s – five years after it was opened by then-prime minister Gough Whitlam on Australia Day 1975 – with the former tourist attraction providing a glimpse into life as an early settler.
The 120ha site was purchased from the NSW government at some point, but Old Sydney Town closed in 2003, never to reopen.
Six years ago Mr Chiu said he was willing to rebuild it, on the condition that Central Coast Council rezone 30 per cent of his surrounding landholding for residential or commercial development. Mr Chiu said at the time that the former theme park occupied only about 10 per cent of the land he owned in the area.
But he also said that if the rezoning did not occur, he would be forced to sell the land.
“That would really be unpleasant for me personally to sell it because it’s been with us all these years,” he said at the time.
A re-enactment at the Old Sydney Town. Picture: Central Coast Council Library Services
“But what can you do? We are in business and you can’t sit on something for ever.”
A liquidator’s report into Mr Chiu’s company Myoora Land, which owned the property, says in May 2018 the site was sold, with Myoora’s payment about $20m.
But the liquidator’s report goes on to say that $16.9m of this money was paid to a company called Interhotel, which was neither a shareholder or creditor of the company. While the payment was recorded as a “loan” to Interhotel, the report says, “the company does not appear to have entered into a loan agreement or obtained any security in respect of this loan’’.
“Interhotel is registered in Hong Kong and its directors are Ms Clare Annabelle Chiu, Mr Richard Chiu, Mr Stephen Godfrey Linch and Ms Ulla Schneider,’’ the liquidator’s report says.
Richard Chiu’s company, Myoora Land, owned the property.
“Both Mr Chiu and Ms Schneider are also former directors of the company.’’
The report also says the sale of properties generated a capital-gains tax liability that the ATO calculated at $2.3m, and which was the trigger for the ATO to wind up the company.
But the liquidator, Peter Krejci of BRI Ferrier, says Myoora incorrectly claimed the Small Business Capital Gains Tax Concession, and the actual liability is believed to be at least $5.1m.
Mr Chiu, Ms Schneider and a Paul Kiley all quit as directors of Myoora late last year, the report says, with George McMillan appointed as a director in November.
“In the director’s questionnaire and report on company activities and property, he attributed the company’s ultimate reason for failure to be the cessation of rental income,’’ the liquidator says.
A bullock team took visitors for rides around the site. Picture: Central Coast Council Library Services
“I do not agree with the director’s explanation for the company’s failure. My investigations to date suggest the company ultimately failed due to the transfer of sale proceeds to Interhotel without servicing the ATO’s income tax liability that arose from the sale of the two properties.’’
The company had just $10,506 in the bank when it was placed in liquidation. Mr Krejci says in his report that the company may have been insolvent from as early as May 2018 “when the income tax debt was created by the sale of the two properties’’.
“Through the transfer of sale proceeds to Interhotel, the company was unable to satisfy the outstanding debt remaining.
“My investigations indicate that an insolvent trading claim may be valued at circa $5.1m.’’
The federal court recently ruled that Mr Chiu, Ms Schneider, Mr Linch, Ms Chiu and a Mr Warren Chiu be summonsed to appear before the court “for examination by the plaintiff, about the examinable affairs of Myoora Land’’.
Mr Chiu was able to be served in the UK and/or Hong Kong while Ms Schneider and Mr Linch were to be served in France, and were asked to produce documents on or before June 28.
Comment was sought from Mr Chiu and Ms Schneider.
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