Jon Adgemis’ former chief financial officer has told a court about the severe financial stress of running businesses which the failed pub baron used to fund a lavish lifestyle in the lead-up to the $1.8 billion collapse of his hospitality empire.
Alexander Andruska, a Woollahra councillor who worked with Adgemis since 2012, told a Federal Court examination into his former boss’s financial affairs that it was a “complete mystery” what happened to money invested in the former KPMG partner’s Public Hospitality Group.
Adgemis declared bankruptcy last October owing $1.8 billion to creditors. Lawyers for liquidators BRI Ferrier are currently hearing evidence from a string of witnesses related to his companies.
Andruska’s evidence painted a picture of a tangled web of businesses, under near constant financial stress, but where Adgemis used funds to maintain a lavish lifestyle.
“It was always under financial stress because Jon would always overcommit … he had an exorbitant lifestyle that he had to maintain,” Andruska said.
He said that Adgemis had “absolutely” used his group of companies to continue funding that lifestyle, which included buying a yacht once owned by Shirley Temple and a string of luxury cars which have since been sold to pay off his creditors.
“A lot of it was dealing with one disaster after another,” Andruska said of managing the finances of Adgemis’ companies
Andruska, who was recently employed as a staffer for Liberal senator Andrew Bragg, said that trying to find out where all the money went was a “thankless job”.
“It was very stressful. I wanted to bloody blow my brains out,” he told the court. He also said that the stress had manifested in “depression and excessive drinking”.
“Jon had a reputation as the worst communicator in Sydney,” Andruska said.
“What Jon would do was have these information silos. Everyone would have a little of the picture, but nobody would have it in its entirety,” he said.
This week’s hearings have revealed where at least some of that money came from. The court heard that the Australian Taxation Office was examining around $1 billion in spending as part of an alleged sham tax scheme, where one of Adgemis’ businesses, JAGA Group Constructions, had received $77 million in GST refunds.
Andruska said the GST refunds were essential to the continued running of Adgemis’ businesses.
“I do not think the company would have been able to trade at all but for the $77 million,” he said.
“He [Adgemis] was aware that they were dodgy claims,” Andruska said of the GST refunds. Asked why he had not taken further steps to verify the underlying claims made to the tax office, Andruska said: “Jon’s a force of nature, people just do what he tells them to do.
“It’s like having the frog in the boiling pot of water. You just don’t realise it’s boiling until it is,” Andruska said of Adgemis’ alleged scheme.
Adgemis created Public Hospitality Group in 2021 with designs on becoming a hospitality mogul to rival Merivale’s Justin Hemmes.
He bought 22 properties across Sydney and Melbourne including The Norfolk in Redfern and Alexandria’s Camelia Grove Hotel in a debt-fuelled pandemic-era buying spree.
But the business, which relied on cheap cash and high-interest private credit loans, quickly began to struggle with repayments, and teetered on the brink of collapse before it was rescued in the form of a $400 million lifeline from Deutsche Bank in early 2024.
In October last year, Adgemis declared himself bankrupt, with debts of $1.8 billion, leaving behind a lengthy list of creditors including hundreds of former hospitality staff, Monaco-based businessman Richard Gazal, Deutsche Bank and the Australian Taxation Office.
Adgemis was due to front the liquidator’s examinations last week, but his lawyers are seeking to argue that his appearance is an abuse of process. He is also trying to get his examination held in private.
Andruska told the court that days before he was due to give evidence, Adgemis had asked him to take similar steps to delay facing the examination.
“He said that I should be bringing a lawyer and … I should be doing the motions he did the other day to delay his hearing.”
Andruska did not have a legal representative. Andruska is a long-time Adgemis lieutenant, with the businessman appearing at a party to celebrate his election to Woollahra Council in 2024. That year, Adgemis reportedly gave Andruska a 2016 Mercedes GLA 180 in August 2024 in repayment for some expenses he’d covered.
Now, Andruska is one of Adgemis’ many disgruntled creditors. “I lent money to Jon in 2016, I never got that money back,” he said. “I have outstanding wages from 2017-18 that have never been paid.”
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Kishor Napier-Raman is a senior business writer for The Sydney Morning Herald and The Age. Previously he worked as a CBD columnist and reporter in the federal parliamentary press gallery.Connect via X or email.From our partners
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