Bust business owner's 'unhinged' splurge on cars, nightclubs, fast food, booze: report

Rubik3 Pty Ltd, which has at least $30 million in government procurement contracts, was taken over by administrators Slaven Torline in March and owes the Tax Office $4.5 million.

A former co-director of Rubik3, who The Canberra Times has chosen not to name, ordered a financial audit into the company due to alleged "unhinged spending" by owner and former public servant, Guy Earnshaw.

The co-director took Mr Earnshaw to court to gain access to the financial records.

The Supreme Court of the ACT ordered Mr Earnshaw to give the co-director complete access to the records in May 2020.

The co-director said he then paid accountant Ross Beames, from Infinium Advisory, $10,000 of his personal funds to audit the company.

'Unhinged' spending

According to the auditor's report, Mr Earnshaw is alleged to have used the company account to pay for Melbourne rent, luxury cars, child support, nightclubs, bars and Spilt Milk tickets.

Mr Beames said Mr Earnshaw seemed to spend big on personal items despite his business being overdue on significant taxes, putting the company at risk of becoming insolvent.

Mr Earnshaw appeared to fund expensive nights out using company money.

Cash was splurged on a bike, mattress, Apple products, Ticketek, fast food, groceries, clothes, make-up and nightclubs.

On one date in April 2019, Rubik3 spent nearly $1400 on establishments including 88MPH, Cube, Knightsbridge, Hopscotch, McDonalds, Coles and Big W.

"The [company] credit card has been used in a manner which essentially represents an unlimited financial resource for Mr Earnshaw," the auditors report said.

In the 2019-20 financial year. the company paid more than $117,000 to a family law firm. Mr Earnshaw had just divorced. He also submitted a tax return for the same amount.

From 2019 to 2021, Rubik3 loaned Mr Earnshaw $758,000.

Rubik3 also appeared to pay about $63,000 for Mr Earnshaw's Melbourne rent.

The company issued about $224,000 worth of bonuses, without specifying who received them, over several years.

Two luxury cars, a LandRover and an Alfa Romeo used by Mr Earnshaw and worth about $500,000, were financed by the company.

Mr Beames said it appeared another $76,500 worth of transactions were inaccurately described in the system.

Charged to company account:

Mr Beames said in the report, "in the event I was provided with a higher budget my review observations and conclusions may have differed".

"A large number of transactions may potentially be unlawful in the context of the Corporations Act and other relevant legal considerations. I offer no [opinion] on the legality of the large number of transactions highlighted for review."

The Canberra Times is not aware of any legal proceedings against Mr Earnshaw regarding the matter.

The company owes the Australian Tax Office $4,540,801, according to reports external administrator Slaven Torline submitted to the Australian Securities and Investments Commission (ASIC).

Rubik3 claimed the Bureau of Meteorology owes it $300,000. The Bureau denied this.

Rubik3 has assets worth about $612,312, mostly cash held in bank accounts, and does not owe employees any money.

A separate ledger provided to The Canberra Times suggested Rubik3 spent big on marketing.

From July 2019 to June 2021, Rubik3 spent more than $285,000 on advertising.

This included $48,000 to the Riotact from 2019 to 2021.

Mr Earnshaw has also advertised in The Canberra Times and Nine papers.

There is no suggestion the money spent on advertising was inappropriate.

Mr Earnshaw spoke to the Riotact for a story published on March 21. He said Rubik3 was not "bust".

A Region Media spokesperson said:

"Rubik3 is no longer an advertiser with Region Media. The March 21 story was part of Riotact's editorial coverage and not part of any commercial arrangement. It was written by well-respected journalist Ian Bushell, a former Canberra Times Chief of Staff."

Mr Earnshaw told the Riotact that a federal government client was a victim of cyber fraud, resulting in funds being paid to the wrong bank account.

This meant Rubik3 was unable to pay taxes.

Mr Earnshaw said his other companies, Rubik3 Indigenous and Really Awesome People, had bought out Rubik3 contracts.

Rubik3 holds at least $30 million worth of government contracts.

A Bureau of Meteorology spokesperson said the department was not a victim of cyber fraud.

"A Bureau supplier (Rubik3) was victim of a cyber fraud in February 2022," the spokesperson said.

They said neither Rubik3 or the Bureau owed the other money.

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In an email from April 2022, seen by The Canberra Times, Mr Earnshaw told the co-director "all funds have been recovered" from the client he said was a victim of cyber fraud.

"Rubik3's systems identified the issue and that assisted the client in identifying and recovering the funds," he wrote.

Mr Earnshaw said an Australian Federal Police investigation into the incident had closed, and that he lodged a complaint with Victoria Police.

The Canberra Times has contacted Mr Earnshaw by email and phone. He did not respond.