The chief executive of Australian security giant MA Services has moved to Dubai as corporate investigators pursue millions of dollars in loans he took from the firm prior to its collapse amid revelations of its links to bikies, as well as tax evasion, sex harassment and systemic worker exploitation.
Along with MA’s still growing tax debt of $19 million, administrators are chasing almost $13 million in loans from the firm prior to its collapse before Christmas, including at least $4.8 million lent to founder Micky Ahuja’s personal accounts.
Preliminary inquiries by administrator Jason Tracy of Alvarez and Marsal have also identified at least $20 million owing in superannuation and entitlements to some of the thousands of security guards who worked for MA Services around Australia. Ahuja is suspected of potentially breaching “his statutory duty not to trade whilst insolvent”, which warranted further investigation.
“Given the quantum of employees who have outstanding entitlements, we have been working to ensure employees are able to lodge claims and access information with respect to amounts owed to them as soon as possible,” Tracy said in a report to creditors obtained by this masthead.
Prior to his company’s collapse, Ahuja lived a lavish lifestyle that included driving a Rolls-Royce 4WD, two Mercedes G-Wagons and a Lamborghini Urus; he took luxury holidays; and made property acquisitions.
Company insiders also told this masthead the actual amount in unpaid wages and superannuation owed to the firm’s largely migrant workforce and the Tax Office is likely to be far higher, given MA used a network of front companies to operate and disguise the suspected underpayment of staff and rorting of the Tax Office.
Over the past month, this masthead has been contacted by more than a dozen security guards who say they were underpaid for years. Even though they wore the distinctive MA uniform while working for the firm’s clients – which include Coles, Amazon, the Australian Criminal Intelligence Commission and the Department of Prime Minister and Cabinet – they were actually employed and paid via a network of front companies that had no formal legal relationship with MA.
The MA Services story has emerged as a shocking and still unfolding tale of corporate greed and questions of governance failures. The latter extends beyond the once darling of Australia’s security sector to some of the firm’s blue chip corporate, sporting and government clients.
Companies including Coles and Kmart, several AFL clubs and the Department of Home Affairs have faced questions about whether they missed red flags suggesting the firm Ahuja built into one of Australia’s biggest security providers was engaged in worker exploitation and tax rorting.
Meanwhile, Ahuja, whom this masthead has confirmed has moved to Dubai, has sought to publicly minimise the scandal, releasing a series of press releases and advertorials over the past week proclaiming himself as one of Australia’s greatest emerging entrepreneurs and founders.
When asked by this masthead about the allegations dogging Ahuja and his firm, his wife, Sasha Ahuja, declined to comment on his behalf while describing the claims of wrongdoing as “false, unjust, and deeply damaging to his reputation, livelihood, and family”.
“Micky spent more than 15 years building a workforce-intensive organisation and took on risks that many founders choose not to,” she wrote in a lengthy text message that sought to shift responsibility for MA’s woes away from her husband.
“In large workforce environments, when … businesses … employ hundreds or thousands of people across multiple sites, shifts, and jurisdictions, no founder can realistically control every individual’s past or every conduct, even where licences, checks, and systems are in place – yet that complexity is often overlooked.
“Staying anchored in the past would take away his ability to build a future. He needs space to focus forward, not revisit what has already taken so much from him.”
Micky Ahuja may not have that option: administrator Tracy is now pursuing him to recover funds from a series of suspect transactions and moving to liquidate the firm, having sacked several thousand employees just prior to Christmas.
In a report to creditors, Tracy said he was recommending the firm be dissolved because it was insolvent. MA’s inability to pay its debts was triggered by a Tax Office investigation determining the security firm had failed to remit millions in GST, but Tracy also said in his report that this masthead’s series revealing wrongdoing at MA had sparked the company’s demise.
Tracy said he would pursue “further action” against Ahuja to recover loans of $4,791,987 that “arose as a result of the company paying the director’s [Ahuja’s] personal expenses or the director’s drawings”.
“We have issued a demand to the director for repayment of the loan. As at the date of this report, the director has not responded to our demand.”
If Ahuja fails to repay the funds, he could be declared bankrupt or have his portfolio of properties across Melbourne seized and sold.
Tracy is also pursuing unsecured loans to companies linked to Ahuja worth at least $8.29 million, his report said.
Another line of investigation involved dozens of company cars, including “a number of vehicles that had been transferred to various parties either for no consideration or in lieu of payments allegedly owing to them”.
“Where appropriate, we have already commenced (and will commence further as required) recovery action, including with police involvement,” the report said.
The collapse of MA Services sparked an unprecedented crisis in the nation’s private security industry. More than 1500 guards working at major retailers such as Coles, Kmart, Bunnings, Dan Murphy’s and Amazon were told in late December to “cease work immediately”.
Before this, the ATO was pursuing MA’s subcontractors for millions of dollars in allegedly unpaid tax in what liquidators and authorities suspect may involve a major tax fraud scheme.
This masthead’s major and ongoing investigation into MA also revealed how the firm had faced sustained scrutiny from authorities and liquidators but had still won contracts with major corporate and government clients. MA also won lucrative but since abandoned contracts with several AFL clubs and major sporting events, elite schools and universities, and state government infrastructure projects in NSW and Victoria.
Ahuja suddenly resigned from MA late last year in response to allegations he had been involved in sexual harassment, bullying and offering women cash in exchange for sex.
It has also been revealed that MA Services Group had a previous business relationship with a labour hire firm owned by a bikie gang boss.
MA personnel previously attempted to cover up its role in an ongoing and controversial operation involving a private security force sent to the Pacific island of Nauru to guard exiled Australian immigration detainees.
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Nick McKenzie is an Age investigative journalist who has three times been named the Graham Perkin Australian Journalist of the Year. A winner of 20 Walkley Awards, including the Gold Walkley, he investigates politics, business, foreign affairs and criminal justice.Connect via email.