Restaurant group Lentil as Anything could face criminal charges for trading while insolvent
Accounting firm Worrells has flagged serious deficiencies in how Lentil as Anything Group was operating before it fell into administration in February this year.
The pay-as-you-feel, social enterprise restaurant group, which is currently being wound up, has been accused of trading for three years while insolvent.
After 21 years, the Shanaka Fernando run Lentil as Anything went into administration, with debts of at least $369,000 owed to employees.
“It is our preliminary position that the company was likely insolvent from at least 30 June 2019, and likely earlier,” the Worrells report said.
Substantial investigations are ongoing, however trading while insolvent can lead to criminal or civil charges.
Financial mismanagement has plagued the group in recent years, with The Age and The Sydney Morning Herald reporting underpayment of staff.
Further to this it is alleged that $11,279 of the registered charity’s money was used improperly on Fernando’s private expenses, including paying his electricity, water and gas bills, and travel.
Fernando has denied all claims and has threatened to sue for defamation.
A recent creditor’s report from Worrells states the chain collapsed with creditors owed nearly $600,000, including at least $110,000 in employee entitlements and $258,491 in superannuation.
Record keeping was also found to be a problem, which is another potential criminal offence.
Worrells stated, “material deficiencies render the books and records in their current state insufficient to enable true and fair financial statements to be prepared and audited”.
The legal status of staff and how they were paid has also come under scrutiny, with eligible employees able to claim up to 13 weeks’ wages, through a federal government scheme.
Other creditors include the Abbotsford Convent, which was owed $85,000, and the Australian Taxation Office as well as dozens of small suppliers.
While it set out as noble pursuit, providing more than 1 million meals a year, of which only 30 per cent were paid for, it looks to have ended in disaster through mismanagement.
Irit Jackson, 21st April 2022
