More information has come to light from the Australian media on DHR International and it status in Australia.
We've written before about DHR's current consultants in Australia (Ben Burrell, Margaret Dillon and James Gathercole) being listed on the DHR web site as working in DHR International's Singapore office but really being in Melbourne or Sydney, Australia. We've written about potential consultants who were asked to join DHR International in Australia but were told by "shady" DHR leaders they would have to "pretend to be working out of Singapore".
Well, this article from the Sydney Morning Herald makes for some interesting reading. A similar article can found in other leading Australian newspapers such as the Age in Melbourne, Brisbane Times, Canberra Times and WA Today.
The article gives us some answers to what's been going on down under and explains that DHR:
- withdrew $293,264 from DHR Australia's bank account in November 2012 and sent it offshore, presumably to Chicago
- signed off on the financial statements that DHR Australia was solvent in March 2013
- despite being solvent, claimed to go "belly-up" in Australia in 2013 so that it could fire the DHR Australian team less than a month later in April 2013 and then did not pay them their entitlements
- removed equipment from the DHR Australian offices, including all the computers and legal records, and sent these to (presumably South) Korea - they "shut up shop so quickly and completely even staff peanut butter was taken"
- transferred Australian clients to another DHR entity in Hong Kong, including a contract with a paint company called Wattyl
- had a "racy departure" from Australia, and their creditors and liquidator are still chasing them
- stripped the assets of the business and did a "phoenix job"
- continue to operate in Australia, have Australian phone numbers but have "no living Australian corporate incarnation"
- are completing assignments for Australian clients searching for Australian candidates for Australian-based roles, but operate out of the "tax haven of Singapore"
- are relying on the Australian taxpayer to pay for employee entitlements: Kevin Kummer of DHR sent an email to Australian employees on April 20, 2013, saying: "As of April 2nd DH International ceased operations and terminated all employees. As such we want to make sure we take the correct legal steps to shut down the business to ensure all former employees are properly paid either by DH or by the Australian government scheme Fair Entitlements Guarantee". According to LinkedIn, Kevin Kummer worked for DHR between January 2012 and March 2014, leaving as "Vice President of Accounting & Finance"
Do the Australian IRS and SEC care about this? Do they care that DHR are still operating in Australia but have no corporation there? Are DHR paying taxes in Australia?
"In the case of the Chicago mob [DHR International], the staff might have been paid out, were it not for the transfer of the assets before the demise of DHI. Instead – and this is the broader angle – the Chicago mob is trying to rely on the Australian taxpayer to fund its employee entitlements."
As the Sydney Herald journalist puts it: "we call upon readers now to consider whether their taxpayer dollars should be deployed in this exercise of paying out employees of what is ultimately a large Chicago firm, which has already obliterated its obligations to the Australian Tax Office via an administration, but which is poised to arise phoenix-like from the ashes of its predecessor as one of the big players in the world of executive recruitment".
We note that the Australian journalist tried to get a comment from a (female) DHR executive: "Executives of this entity were contacted for comment but declined to speak. One hung up on your humble essayist but not before saying she could not talk because legal claims were afoot." Well, at least we know we should go looking for more lawsuits against DHR in Australia.
And what does this mean for CTPartners in Australia? When DHR International acquire CT, what will happen with their Australian operations (Melbourne, Perth and Sydney)? Will all of the team of 16 consultants have to pretend to be in Singapore? Or will DHR's acquiring CTPartners allow DHR to operate "above board" in Australia again, avoiding the regulators, liquidator and lawsuits that are "afoot"?
Tip of the hat to the readers that sent us an email or comment alerting us to the original Australian news story. We suspect there's more information: if you are a former employee or creditor, please email us. You can use an anonymous email service if you like.