Nick Berman … the mayor of Hornsby said he inherited a financial mess at the company from his former business partner.A FAILED business venture by the long-standing mayor of Hornsby, Nick Berman, has cost taxpayers more than $1 million and left unpaid debts of nearly $5 million as well as hundreds of thousands of dollars owing to his former employees.
The former staffer in the Howard government became Hornsby’s first popularly elected mayor in 2004, and was returned to office in 2008.
Since 2009 he has been the president of the Northern Regional Organisation of Councils and this weekend he is seeking a third four-year term as mayor.
But Mr Berman has left a string of creditors and unpaid employees in the wake of his private business dealings, and questions have been raised over his fitness to hold public office.
The Australian School of Business and Technology was placed into liquidation in September 2008. The school was owned by Atozed International, and Mr Berman was the sole director at the time.
Yet when the Herald put questions to Mr Berman on Thursday, he insisted others were to blame for the multimillion-dollar collapse. ”Everyone ultimately has to share some responsibility … I’m not the big villain in all this,” he said.
At the time of the company’s collapse, the school had more than 300 foreign students enrolled who had paid their fees in advance. However, when the liquidators moved in, there was just $1637 in the company’s bank accounts.
The liquidator’s report to creditors the following March said that it appeared that share investments owned by Atozed had been sold for $75,000 just before Atozed went under, although the liquidator could not identify what happened to the proceeds.
In addition, the liquidator found that about $150,000 had been made in loans to the company’s former director Avinash Nichkawade who was Mr Berman’s business partner in another venture, Power Education.
Mr Berman said he was unable to comment on these transactions because he did not have the information immediately at hand and could not recollect fully what had taken place four years earlier.
He also pointed out the company he inherited was already in administration and it was his aim for the company to trade itself out of difficulty.
”I was there trying to run a business I knew had serious debts,” he said. ”The owner did not tell me everything I needed to know.”
The fallout from the collapse meant the federal government was forced to pay more than $1 million to students who had paid their fees to Mr Berman, while the Australian Taxation Office became one of the school’s major unsecured creditors, which were owed $4.9 million in total. A further $500,000 is still owed to the teaching staff.
One of the former employees told the Herald the school still owed her tens of thousands of dollars in wages after staff were only partially paid or not paid at all throughout the last six months of the company’s life.
”It cost me my marriage, it cost me my health,” she said. ”We were told the director would take out loans and sell property to pay us, but that never happened.”
Another former employee said she was surprised to learn that Mr Berman had become a successful figure in local government. ”How can this man be a mayor, when he owes so many people a lot of money?” she asked. Both women asked to remain anonymous because they still work in the private college sector.
On May 31, 2010, Deloitte concluded it was unable to pursue Mr Berman through the courts because there was no money left to pay the liquidator. Moreover, the time had lapsed to take legal action, with suggestions in the liquidator’s report Mr Berman had failed to respond in a timely manner to the liquidator’s queries about certain transactions.
This Mr Berman disputes, saying he gave ”full co-operation” to all authorities.
”Someone else may have been dragging their heels but not me … why don’t you have a chat to the owner,” he said, referring to Atozed’s previous director, Mr Nichkawade.
ASIC records show Mr Nichkawade resigned as a director in September 2007, with Mr Berman having become a co-director three months earlier, then operating as the sole director of the company until October 2010.
A Deed of Variation signed by Mr Berman in December 2007 shows from that time forth he took sole responsibility for Atozed, including its debts.
”I’m surprised to hear that,” said Mr Berman, who insists he inherited the financial mess from his former business partner. He said he did not believe his past business dealings had any relevance to his competency as a councillor or the mayor of Hornsby.
Council elections-what you need to know.
Voting is compulsory for all Australian citizens 18 and over. The penalty for not voting is $55.
If you own a property or a business in another council area you may register to vote for that council as well.
Polling booths are open from 8am to 6pm.
You cannot lodge an absentee vote and you must be in your local council area.
You are voting for councillors, and, in some councils, the mayor.
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