Potato boss Paul Rennie ‘can’t recall’ overseas transactions, Federal Court hears
Potato king Paul Rennie has told a court he is unable to explain why he sent millions of dollars to tax havens in transactions revealed by a Project Wickenby investigation.
The Federal Court heard Mr Rennie had been raided by federal police, who seized documents related to his Griffith-area potato farm, and there was ”a real prospect” he would be charged with criminal offences.
Last year Rennie Produce was sold to a consortium led by Hong Kong’s Chevalier International as a package with NSW fruit and vegetable heavyweight Moraitis Group.
No allegations are made against Moraitis Group, which was founded by prominent racehorse owner Nick Moraitis.
Project Wickenby, jointly run by the Tax Office and the AFP, has been investigating about $21 million allegedly sent offshore by Rennie companies in transactions dating back to the late 1990s related to the potato farm, which is the biggest in Australia, producing 32,000 tonnes a year.
ATO lawyers struck a settlement with Mr Rennie in 2012 but have reopened the probe after becoming concerned Mr Rennie was not meeting his end of the bargain.
Under the deal, Mr Rennie was supposed to bring the money back into Australia, but the ATO believes about $8 million has yet to return. Under questioning at a liquidator’s examination on Thursday, Mr Rennie repeatedly claimed not to recall transferring millions of dollars offshore.
He was also unable to remember what benefit his company Rennie Produce received when it sold its business to Rennie Produce (Aust) in a complex series of transactions that allegedly transferred ownership to Lexington Provident, a company registered in tax haven Guernsey.
The court heard Lexington Provident was linked to Abe Erdynast, a tax adviser who lives in Israel.
Mr Rennie’s lack of recall drew disbelief from Leslie Glick, QC, who was questioning him on behalf of Pitcher Partners, the liquidators of one of his companies, Rennie Produce (Aust).
”I want to suggest to you that you are pretending to be a simpleton for the purpose of not answering my questions,” Mr Glick said.
Mr Rennie said he followed advice from Mr Erdynast and Mr Mowbray, a solicitor who the court heard fled Australia in 2000 after his office was raided by federal police.
He said he was ”surprised” to learn that $US1.2 million sent to him from the Hong Kong bank account of a company called Ping Fu in March last year was not from Mr Erdynast but instead came from Alan Cheung, a businessman based in the former British colony.
He admitted that in 2007 he promised to pay $12.5 million to another of Mr Cheung’s companies, Champion Grow, for the intellectual property rights to a perfectly round potato.
He denied Mr Glick’s suggestion that a down payment of more than $3 million was ”a sham transaction in order to get a tax deduction here and hide the money in an overseas jurisdiction”.
Mr Rennie said he managed to claw back about half the money when the variety failed.
”I do speak to Mr Cheung,” Mr Rennie said.
”I had a very good relationship with him for a number of years and the relationship is now not good.”