Ex-Knights chief and Tinkler at loggerheads over tax bill

A BITTER war of words has erupted between former Newcastle chairman Rob Tew and Nathan Tinkler's Hunter Sports Group over an unpaid $350,000 tax bill.

Tew broke his silence yesterday, describing the situation as ''another example of HSG not paying their debts''. Tinkler's group blamed the debt on the previous Knights administration's ''poor accounting''.

It is understood the debt was uncovered by the Australian Taxation Office during an audit of the Knights Members Club, and comes at a time of growing uncertainty about Tinkler's financial position.

The Newcastle Herald reported last month that Knights suppliers, including medical providers, had been forced to employ debt collectors to chase outstanding bills.

A spokesman for HSG said yesterday all Knights Members Club debts, totalling more than $6 million, were paid at the time of acquisition, or August 5, last year.

''This new debt has come to light due to poor accounting from the previous Knights administration and came to light following a recent audit of the members club,'' he said.

''Now that HSG is aware of this new debt, this will be extinguished in the normal course of business.''

But Tew, who is credited with ensuring the Knights' future by demanding a host of non-negotiable terms and conditions as part of the takeover, including the $20 million bank guarantee, described the criticism as ''nonsense''.

He said the debt was incurred because Tinkler failed to meet the initial agreed handover deadline on June 30 last year, forcing the Knights Members Club to trade into the following financial year.

Tinkler was supposed to have provided a $20 million bank guarantee and settled all the club's outstanding liabilities by the end of the financial year but requested an extension and settled the takeover bid on August 5.

''As a consequence of normal trading, due to the delay in settling by HSG, we traded beyond June 30 and incurred normal trading expenses and revenues that attracted GST,'' Tew said. ''GST is acquitted or remitted quarterly in arrears, so it was not due to be reported until the end of September and was payable in December … What I won't have is, 'This is a mistake by the previous board,' or that it was unforseen. That is nonsense, and it is clearly the responsibility of HSG.''

Knights members club chairman Peter Corcoran confirmed that under the terms of the privatisation deal, the tax debt had to be paid by HSG.

''We forwarded on the notice to HSG, and as far as I know it is being taken care of,'' he said.

Tew said he spoke with Corcoran on Monday after hearing about the tax bill, and Corcoran assured him all invoices, including tax bills, were forwarded to HSG for payment when they were received.

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