Scale Facilitation established a company in tax haven of Malta

Scale Facilitation, a company raided by the AFP in June over the biggest alleged tax fraud in Australian history, established a subsidiary in Malta with the help of PwC to reduce its tax obligations, Open Politics can reveal.

Sean Johnson22 November 2023

Malta is known as the ‘Panama of the EU’ for a good reason. In addition to sunny weather and beaches, the island republic has the lowest corporate tax rate in the European Union, with foreign companies enjoying an effective rate of 5% if they can structure their affairs the right way.

Insiders at Scale Facilitation have told Open Politics that CEO and founder David Collard registered a company called Scale Facilitation Finance Ltd in Malta in February 2023 for the sole purpose of reducing Scale’s tax obligations in Australia, the United Kingdom, and the United States, where corporate tax rates range from 19 to 30%. 

The Malta entity’s listed directors include Collard, his old school friend and Scale’s former head of external affairs Thomas Dwyer, who’s since resigned, and Maltese lawyer Jesmond Manicaro.

Manicaro is also the company secretary, a service he provides to over sixty companies.


Source: North Data.

Collard’s establishment of Scale Facilitation Finance came a few weeks after Scale subsidiary Recharge Industries was announced as the winning bidder for Britishvolt, a collapsed lithium-ion battery startup with plans to build a £3.8 billion gigafactory in northern England.

PwC

PwC Malta advised ex-PwC partner Collard on how to structure Scale Facilitation Finance and register it with Maltese authorities. We also understand Thomas Dwyer visited Malta on several occasions to meet with local PwC staff.

What role, if any, was played by scandal-plagued PwC Australia in Collard’s decision to set up in Malta, or whether they introduced him to their colleagues at PwC Malta, is not clear.

However we do know that a senior PwC Australia partner with expertise in international tax and transfer pricing worked for Scale under PwC’s global $3 million contract with the firm and spent time with Collard in London around the time of the Britishvolt deal and registration of the Maltese entity.

Legality and ethics

While there is nothing illegal about Collard’s actions, or indeed those of other directors and PwC, former staff with intimate knowledge of Scale Facilitation Finance told Open Politics they were always uncomfortable with the arrangement.

So much for Collard’s claims that Scale’s planned lithium-ion gigafactories in Geelong and Northumberland would generate tax revenue, they thought.

Their discomfort only increased following the AFP raid on Scale’s Geelong offices over an alleged $76 million tax fraud involving BAS statements and claims for R&D tax offsets in 2022, although at this stage there is no evidence that Scale Facilitation Finance, which was only established in 2023, figures in the tax probe.

Nonetheless, it makes you wonder. If the allegations are proven, it’s hard not to think that an entity established solely to reduce Scale’s global tax obligations could have been destined for a central role in the alleged scheme, had the AFP not come a knocking four months later.

We sought comment from David Collard, Thomas Dwyer, and PwC Australia.

Collard responded that he needed more time to digest our straightforward questions and get information from his “advisors and internal team”. This seems implausible as Collard barely has any staff left after not paying wages, while he no longer has external advisers on the books as he hasn’t paid their invoices. PwC is one of many consultants owed money.

Thomas Dwyer, whom we understand is owed significant sums of unpaid wages, work expenses and super, said in a written statement (see below) that he resigned from Scale Facilitation in October and relinquished his directorship of Scale Facilitation Finance Ltd at the same time. “I am no longer in contact with David Collard or Scale Facilitation. I’m looking forward to moving on with my life and assisting other former and adversely affected employees to do the same.”

PwC Australia did not respond.

Will Scale Facilitation be wound up today?

The Supreme Court of Victoria could declare Sanitex Global, the Scale company that employed staff and engaged contractors, insolvent as soon as today if Collard is unable to prove the company can meet its liabilities to Lake Advisory, a Geelong consulting firm owed over $100,000.

The winding up proceedings will be livestreamed sometime between 10:30 – 11.30 this morning.

Many ex staff will be tuning in with popcorn because once the company is wound up they will be able to access the Federal government’s Fair Entitlement Guarantee of up to 13 weeks of unpaid pay and unpaid annual leave.

Even if Sanitex can prove solvency against Lake Advisory’s claim, things won’t end there for Collard as we understand several staff are looking to join the wind up action.

Statement from Thomas Dwyer

“I resigned from my role as Head of External Affairs at Scale Facilitation on 27 October 2023, at the same time relinquishing my directorship of Scale Facilitation Finance Ltd, satisfying my obligations under the Maltese Companies Act in full.

Jesmond Manicaro and I maintained a strong professional relationship, and a friendship which will continue.”

“I am no longer in contact with David Collard or Scale Facilitation. I’m looking forward to moving on with my life and assisting other former and adversely affected employees to do the same.”

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