The ATO also contends that Karantzis exercised control over Red 5 Solutions, a British Virgin Islands entity that owns more than 10 per cent of iSignthis.
Asked in October 2018 by this newspaper to identify “the people or person behind Red 5 Solutions”, Karantzis claimed iSignthis was “not privy to ownership of entities on our register”.
The ATO’s submissions reveal that Karantzis was at that time, and remains today, a director of Red 5 Solutions – so was very much privy to its ownership. The other director, and Red 5’s sole shareholder, was (and is) his brother Andreas Karantzis.
In November 2018, Karantzis entered into a contract to buy his former home on Urquhart Street, Hawthorn for $3.2 million. On February 15, 2019, Red 5 sold 17.5 million iSignthis shares on market for proceeds of $3.48 million. The contract of sale on the home was executed 12 days later.“The Tax Commissioner contends that the proceeds [of the February 2019 share sale] were used for the personal benefit of Mr Karantzis … From this it may be inferred that Mr Karantzis was able to direct that the iSignthis Ltd shares be transferred from iSignthis BVI to Red 5 BVI and then used for his personal benefit to fund his family home. When the home was subsequently sold [in February 2021 for $3.6 million], the proceeds were returned to Mr Karantzis’ wife”, of which “$1 million was transferred by Mrs Karantzis to an offshore bank account held in her own name.”
AFR
Yes, @Golfboi on August 10 Red5 lodged a Form 604 detailing a slight reduction in interest from just over 10% to just under 10%. A few weeks later the demerger was announced and Red5 is now participating in that vote. An extremely material transaction with features incredibly advantageous to the CEO given the dispute over the performance shares with ASIC.
