Scale Facilitation is in default in its takeover of Britishvolt. After a crime taskforce raid in Australia and failures to pay staff in the US, its chief executive David A. Collard remains defiant. Sean Johnson of Open Politics questions why PwC is getting paid when staff and creditors have been missing out.
The eulogies from Peter Dutton and Richard Marles have not aged well. Scale Facilitation, the company headed up by entrepreneurial ex-PwC partner, David A. Collard, has been since raided by tax authorities in Australia, had problems paying staff in New York and most recently, just last week, failed a final payment to close the deal to buy British batteries group Britishvolt.
To the chagrin of Britishvolt and its staff and investors, administrators from EY say Scale’s subsidiary Recharge Industries has missed its final payment of £8.57million and is, “As a result … in default of the business sale agreement”.
According to itvNews, “The Australian-American company that rode to the rescue of the failed Northumberland car battery business Britishvolt has failed to pay the final instalment in its purchase of the company”.
Defiant, Scale Facilitation responded “we dispute we are in default”.
Excuses, excuses
The excuses from Scale are running thick. We can now reveal that the company raided in June by the ATO’s Serious Financial Crime Taskforce over an alleged $150 million tax fraud has reportedly paid millions to PwC to provide tax advice on its Australian and UK businesses.
Scale staff have been ropable. Since February, around 50 employees at Scale Facilitation’s New York head office haven’t been paid on time, with the CEO, ex-PwC partner David Collard, and HR initially blaming the problem on temporary “cut off” and “technical” issues with payroll.
In his email to the “team” in late May, Collard had a new excuse: a lack of cashflow.
But hang on, a few staff wondered, if the company has no money, how was Collard able to sign a multi-million consulting contract with his old firm to provide tax advice, including on the acquisition of collapsed UK lithium-ion battery start up Britishvolt in February and Scale’s R&D tax concession claims in Australia.
Consultants first
Rich people doing rich people things, one employee thought. Consultants before us.
But in Collard’s universe, PwC was helping the company increase its cashflow and ability to pay wages, telling staff that the firm had “validated” Scale’s claim that subsidiary Recharge Production UK Limited, which acquired Britishvolt, was owed £5.5 million in Value Added Tax (VAT) receivables or refunds for VAT paid on invoices.
Collard also said he had executed a facility with a UK firm which finances VAT receivables, providing Recharge with advance payments for VAT refunds owed to it by HM Revenue & Customs.
Some of the funds from the UK were anticipated to arrive in the US that day, Collard claimed, and would be “rolled out across the US team in coming days.” And to assure staff that funds would keep flowing, he said the facility was for 24 months, “which we can now tap as we need to each month following our monthly VAT submission in the UK.”
New business was coming in too, Collard said. He had secured a US$ 90 million contract with a large Indian conglomerate in India, though he didn’t say what Scale would be doing to earn such a big lick of money. Nor did he identify the Indian conglomerate which had “trapped” his cash.
Open Politics has been unable to find any publicly available information about Scale or Recharge Industries winning a contract in India or doing anything in the country apart from Collard registering Scale Facilitation Partners India Private Limited in August 2022 with the aim of manufacturing “electric motors, generators and transformers.”
Funds on tap!
But back to the UK. How exactly has Collard tapped Recharge Production UK Limited for money for the US operations? According to Collard’s own words, by establishing a UK subsidiary called Scale Facilitation Operations Limited and billing Recharge Production UK monthly for the “the costs of our global work” in the UK.
https://michaelwest.com.au/is-pwc-caught-up-in-scale-facilitations-alleged-150-million-tax-fraud/