BEN Polis' old company, Energy Watch, is heading for liquidation with unpaid debts of more than $8 million while he faces potential fines of hundreds of thousands of dollars for misleading advertising.
Investigations by administrator Lawler Draper Dillon have also found Energy Watch may have been trading insolvent since as early as July 2009. But early indications were that the former directors did not have enough assets to justify legal action, the firm's Stirling Horne said.
Energy Watch went into administration on May 18 with debts of $8.6 million including $886,000 in employee entitlements, $1.1 million to a secured creditor and $6.5 million to unsecured creditors, including the tax office. "No proposal has been put forward for a deed of company arrangement, so the only alternative left is to put the company into liquidation," Mr Horne said.
A second creditors' meeting is due to be held this Friday. Former employees may get some unpaid entitlements and superannuation, but will have to rely on the federal government's general employee entitlements and redundancy scheme (GEERS) if administrators cannot recover the full $886,000. "The GEERS scheme will have to cover the unpaid entitlements which will potentially leave a massive shortfall for the super that is owed and the responsibility for that, in the union's view, lies with the former directors of the company," Victorian branch manager of the Australian Services Union, Ingrid Stitt, said.
The competition watchdog will reveal on June 28 proposed penalties against Mr Polis and the old Energy Watch for 80 false and misleading claims made in 2011. Energy Watch's business tumbled after offensive comments by Mr Polis were made public in April. Three energy firms terminated their commercial relationship with Energy Watch and several sports clubs terminated sponsorship deals. The company name and assets were transferred to a new company called Energy Watch International on May 16. Mr Polis has nothing to do with the new Energy Watch, owner Danny Wallis told BusinessDay recently.