ATO settles case against Israel Discount Bank

  • 2 min read
  • by

The Australian Taxation Office (ATO) and its co-plaintiffs have settled their proceedings in the Federal Court of Australia (No’s NSD1600 of 2015 and NSD711 of 2020) with the last remaining defendant, Israel Discount Bank Limited (IDB).

In the proceedings the plaintiffs – the ATO, corporations associated with the Binetter family (including Andrew John Binetter and Michael Thomas Robert Binetter and others) and the liquidators of those corporations – alleged (which the bank denied) that:

  • the directors of each company breached their duties as directors, causing the plaintiff companies loss and damage; and
  • IDB assisted the directors’ breach of their duties to the plaintiff companies.

While the terms of the settlement agreement are confidential, the ATO’s agreement to the settlement is subject to significant policies, procedures and oversight to ensure they are consistent with good management, accountability and community expectations.

“These proceedings involved similar claims to a prior case where funds in Israel (offshore deposits) were used as security for advances from the Israeli banks of amounts equivalent to the funds deposited in Israel. The defendants’ conduct led the applicant companies to incur tax liabilities when the ATO disallowed deductions for interest expenses,” Assistant Commissioner Aislinn Walwyn explained.

Assistant Commissioner Aislinn Walwyn said the cases were the result of years of dedicated work by ATO auditors and debt recovery officers, working with the liquidators of the plaintiff companies.

”These cases involved elaborate and complex structures. Investigating such cases requires specialist skills, dedication, and tenacity. The settlement justifies the efforts of the ATO teams over a number of years.”