Council blind to Schwass failure
The Christchurch City Council appears to have not done its homework before renting its botanic gardens cafe to a company directed by celebrity chef Jonny Schwass.
Schwass, through the firm Good Company Canterbury, took over the lease of ilex cafe in October last year.
A simple check of the public Companies Office register would have revealed another of Schwass’s company, BTS Restaurants (BTS), went bust four months earlier owing $750,000. BTS was behind the central city Harlequin Public House restaurant and bar.
It appears neither Schwass nor his then fellow director of Good Company Dan Shanks told the council about his company collapse.
Sources said the industry was ‘‘gobsmacked’’ Schwass’s company got the lease after BTS’s failure.
Schwass, a popular city chef who has participated in many charity events, was last week convicted on 21 charges of misapplying tax deductions and withholding tax of more than $300,000 related to BTS.
Council head of facilities Bruce Rendall said in a statement that the council did not know about the BTS collapse before granting the lease to Good Company.
‘‘When requesting proposals to lease premises, prospective tenants are required to provide information about any matters that may affect the offer of a tenancy, including bankruptcy and insolvency matters.
‘‘None of the information that was provided to the council at the time gave rise to concerns that would have affected the council’s final decision whether or not to grant the lease.’’
Rendall said the council was not aware of any breaches of Good Company’s current lease. All the council’s commercial tenants were up to date with their rental payments, he said.
The council refused to answer questions about why it had preferred Good Canterbury to other candidates for the botanic gardens site and why it had not done its due diligence on Schwass’s business background. It also declined to answer questions on what action it would take now it was aware of BTS’s failure.
Schwass was at work at ilex yesterday and although he initially said he was prepared to answer questions, he later said he was unavailable.
Shanks, the remaining director of Good Canterbury, said he was too emotional to answer questions and did not feel comfortable talking about whether the company still employed Schwass or whether he had informed the council of BTS’s collapse.
Good Company was formed in May last year, five days after the BTS liquidation. Schwass and Shanks were directors and equal shareholders. Shanks is an executive chef with Vbase, a council owned entity that ran ilex until Good Company took over last year. Shanks continues to work for Vbase.
Schwass vacated his Good Company shareholding in late October, but remained a director until earlier this month. His shares were now owned by a trustee service company. He was scheduled to be sentenced on the tax charges on July 6 and was hoping to make a payment to Inland Revenue before then. The court has asked for a report on his suitability for community or home detention.