Go2 People Ltd. (GO2:ASX), the Australia-based provider of vertically integrated recruitment and training services, likely owed as much as AUD 11 million (USD 7.1 million) to the Australian Taxation Office when it entered voluntary administration in May, reports The West Australian, citing a report from the group’s administrators. The report describes the debt as ‘material’ and a major reason for Go2’s failure, suggesting that directors may not have been aware of the growing ATO liabilities.

Insolvency experts from McGrathNicol were called into Go2 People and seven subsidiaries on May 1 after unsuccessful efforts to recover a AUD 900,000 debt left the group without enough cash to continue. Most of Go2 will likely survive, with administrators backing a recapitalisation of the key businesses by rival recruitment group Intowork through deeds of company arrangement.

In its update last month, Go2 Group, which comprises Go2 Recruitment, The Go2 People, Skill Hire training and apprenticeships, NARA Training and Assessing, and Hunter Executive Search Consultants, cited legacy Australian Tax Office liabilities as one of the reasons to call in voluntary administration. In addition to the legal dispute with one of its clients, in January 2022, GO2 discovered it failed to pay superannuation in its entities on time and estimated a AUD 3.1 million (USD 2.0 million) liability payment to the Australian Taxation Office. 

The administrators intend to continue operating the Go2 Group on a ‘business as usual’ basis while options for the sale and/or recapitalisation of the business are explored. SIA reached out to Go2 People for comment, but the company had not yet responded.