Venture capitalist takes on taxman

Controversial former venture capitalist Robin Johannink was in the High Court in Auckland today fighting the taxman and bankruptcy.

Johannink, who a decade ago unsuccessfully sought to list Ilion Technology (formerly Pacific Lithium) on New York's Nasdaq with a $120 million IPO, today is not earning an income and has survived for some years, the court heard, on his family's indulgence.

His tax bill brought him back before the court where Associate Judge Hannah Sargisson heard the original bill was for $68,900 arising from an investment, along with 200 other people, in a production of Joseph and his Technicolor Dreamcoat.

The tax bill has blown out with interest and penalties to $274,000 and his lawyer David Smyth says his client has been unable to now make the weekly $1000 payment, despite having done so from May to November last year.

Johannink, who is insolvent, was today seeking approval of a proposal to stave off bankruptcy.

Smyth says creditors, apart from the Inland Revenue Department, had voted to accept the proposal.

Those creditors though are not, as the IRD's counsel John Ridling said, arms-length independents.

They are, in fact, Johannink's family. Ridling pointed out that there was no formal documentation of any such 'loans' and that the funds had been gifts for living costs and expenses for the last four or five years.

Under Johannink's proposal there would be a pool of cash of $72,400 which would be paid over three tranches - including $30,000 immediately.

The other creditors are Johannink's father, owed $100,000 and the trustee for receivers Meltzer Mason Heath owed $16,000 which has first call under the law.

Smyth argues that if the IRD pushes for bankruptcy, it would receive just 15c in the dollar or just $3150.

He says the IRD would get three times as much under the proposal - just on the basis of just the first tranche or $10,842. The IRD stands to receive $41,319 in total.

Johannink had been in business for 35 years and had not defaulted on his debts, says Smyth.

Four years ago Johannink was ordered by the High Court to pay his former lithium battery developer company Ilion $2.3 millioon.

The court found he had  breached his directors' duties and fiduciary obligations by 'depriving' Ilion of desperately needed cash during a series of capital-raisings.

Johannink has had setbacks with three other technology ventures. In 2001 drug research company Virionyx ended his management contract early; his cash-strapped wind turbine company Vortec shut its doors the same year and in 2002 he departed from management of biotech company Diatranz.

- © Fairfax NZ News