The former CEO of Gildan Sportswear has been fighting tooth and nail for nine years against Quebec, which refuses him tax deductions of nearly 66 million. Greg Chamandy solemnly asserts that he lost a fortune in business ventures like operating a business jet and his wife’s music career.
Private bank in Barbados, private Challenger plane, “substantial losses” in a concert by his wife at the foot of the pyramids in Egypt, expenses in a financial arrangement with the National Bank… The government refuses nearly 66 million in deductions that the man businessman Greg Chamandy has claimed for his “alleged investments” since 2007.
Revenu Québec accuses him of “false representation of the facts through negligence or negligence” and claims more than 10 million in taxes, penalties and interest.
Now exiled in the Bahamas, Greg Chamandy handed over the helm of Gildan to his brother Glenn in 2004. The multimillionaire then embarked on a series of business ventures in mining and agribusiness, with success variable and at the cost of multiple clashes in the courts (see other text).
To defend his personal tax deductions of 65.8 million, the businessman has called since 2015 on an army of lawyers from six firms. A week before his trial began on January 31, Miller Thomson stopped representing him, citing a “broken and irreparable relationship of trust.”
Chamandy then asked for the postponement of the trial, the time to entrust the file to other representatives. But a judge of the Court of Quebec refused forthwith. “His disagreement with his lawyers, of which the Court is informed at five minutes to midnight, seems to be more part of a strategy to obtain a postponement of the instructions”, asserted Mr.e Eric Dufour.
After a new refusal in the Court of Appeal, the businessman was back in court on February 6. According to him, his new tax specialist has just discovered “new elements” which could reduce contributions “to zero”.
In the name of the “best interest of justice”, Judge Daniel Bourgeois agreed to postpone his trial. To the great displeasure of Revenu Québec, which notes “that a trial date involves colossal work”.
Chamandy has until March 31 to amend his tax challenge. “Since the case is before the courts, other than mentioning my desire to fully assert my rights, I do not intend to comment further on this case at this time,” he wrote in a message to The Press.
Expensive concert at the foot of the pyramids
The question at the heart of the dispute: for what purpose did the ex-boss of Gildan spend the 65.8 million he claims in deductions? To be eligible, expenses must be for the purpose of earning business income. The government argues instead that Chamandy engulfed these funds in “personal” projects.
For example, he claims a loss of 4.6 million in the musical career of his wife, Chantal Condoroussis Chamandy.
In his actions against the tax authorities, the businessman tells how he financed the concert in 2007 Chantal live at the Pyramids“a world-class production” in Giza, Egypt.
“Its craftsmen came from Quebec, France, Belgium, Egypt and Italy,” says Chamandy in his petition against the government. The event took place in the desert, which poses several challenges for the production team. »
“Unfortunately, this major effort did not produce the desired results and substantial losses were incurred for the years 2007, 2008 and 2009,” he continues.
According to Revenu Québec, the show “generated income of $41,975 and cost production costs of $2.26 million”.
The tax authorities indicate that only 11 people bought the package which allowed them to attend the show.
PHOTO FROM THE LIQUID NUTRITION FACEBOOK PAGE
Greg Chamandy and his wife Chantal Condoroussis
Chamandy, “being an experienced businessman, did not undertake to invest such considerable sums to generate so little money and, as such, he did not invest these amounts with the aim of earn business income,” says Revenu Québec.
personal aircraft
The businessman also declared for nearly 3.2 million in losses in the operation of a private Challenger jet that his company Oxbridge Aviation SEC bought in 2004 for 9.6 million.
However, the plane “was used mainly, if not almost exclusively, on a personal basis by the plaintiff or related persons”, writes the tax authorities. In 2007 and 2008, he and his relatives were even the only passengers on the plane, according to the government.
From National Bank to Barbados
Chamandy borrowed a fortune for his projects. In May 2011, he had a $113.8 million slate at National Bank, backed by his shares at Gildan. Without selling these titles, he could thus use their value to spend it: this is what planners call “monetization”.
Over the years, this financing has cost him interest and finance charges of 38.9 million Canadian dollars. Chamandy passed them on to taxpayers by deducting them from his personal income, Quebec alleges.
The money from the National Bank loan would have transited, “in whole or in part”, through Chamandy’s private bank in Barbados, Oxbridge Bank and Trust.
In addition to financing the Challenger and his wife’s career, some of the funds were used to purchase a $12.5 million property in Palm Beach, Florida, as well as “vintage car acquisition.” . Always for investment purposes, assures Chamandy.
The IRS doesn’t believe it. According to Revenu Québec, this “seasoned, very successful businessman, co-founder of the multinational Gildan listed on the stock exchange and president of several private companies”, could not ignore that his deductions were not valid.
Contacted by The Press, National Bank declined to comment. “We do not comment on court cases or our client cases,” said Senior Vice President of Communications Debby Cordeiro. The Bank is not a party to this dispute. »
To read tomorrow: From the tax arrangements of a millionaire to the fight against aggressive tax planning: the comings and goings of a lawyer in great demand.
Alleged “fraud” and contempt of court
“I have always been an honest and loyal citizen of Quebec, and I have the right to a fair trial,” insisted Greg Chamandy on February 6 before convincing the Court to grant him a delay for his trial against the tax authorities. “My reputation is just excellent. In fact, the businessman’s name ended up in the newspapers repeatedly because of lawsuits against him, his wife and some of his businesses, research shows. The Press.
Fraudulent payments from creditors
Chamandy and his wife Chantal Condoroussis have been defending for more than four years against an $8 million lawsuit filed by a trustee in the bankruptcy of their Liquid Nutrition Franchising Corporation (LNFC) beverage counter chain.
The couple reportedly exited assets from LNFC just before it filed for bankruptcy in 2015. They transferred them to a brand new entity they had just created, Liquid Nutrition Canada Inc.
PHOTO FROM THE LIQUID NUTRITION FACEBOOK PAGE
In 2013, Greg Chamandy poses with businesswoman Arlene Dickinson from the show Dragon’s Den to CBC, who was one of the ambassadors of Liquid Nutrition.
These 8 million therefore escape the creditors of the bankrupt company, LNFC. For the trustee, there is no doubt: Chamandy and Condoroussis are responsible for these acts committed “in fraud of the rights of creditors”.
In another motion, the trustee also accuses the couple of having used company funds to repay $153,723 to two creditors without their consent after the opening of the bankruptcy process. LNFC also reportedly paid Condoroussis “$26,274.84 in reimbursement for ‘living expenses’ allegedly incurred by the latter in Beverly Hills.”
In 2018, the Chamandy-Condoroussis left their luxurious Westmount home for the Bahamas and the trustee’s lawyer sent them these lawsuits by email. Miller Thomson, however, had the electronic service of the motions set aside, which delayed the proceedings.
PHOTO PIERRE MCCANN, LA PRESSE ARCHIVES
Greg Chamandy in 2003, when he was CEO of Gildan Activewear
Contempt of court
Chamandy was fined $120,000 in 2013 for contempt of court. He persisted in restricting his neighbors’ right of way to a beach adjacent to the vast residence he owned in Mont-Tremblant, in defiance of an ordinance.
“Mr. Chamandy basically does what he wants. Obeying court orders does not appear to be imperative in his moral code,” Judge Mark Shrager said in his ruling at the time.
In 2015, the Court of Appeal lowered his fine, setting it at $10,000.
Trouble with the AMF
Chamandy also had trouble with the Financial Markets Authority (AMF). In 2012, as a shareholder and manager of Richmont Mines, the businessman was fined $5,000 for not declaring certain sales of shares in the company on time.
Gildan dumped by public investors
As part of his case against the tax authorities, Chamandy insisted in court on the ties he has forged with large institutional investors. “I worked closely with the Fonds de solidarité FTQ, Investissement Québec, the Caisse de dépôt…”
PHOTO OLIVIER PONTBRIAND, LA PRESSE ARCHIVES
A Gildan factory in Honduras in 2015
Over the years, Chamandy was able to convince Quebeckers and the Fund to invest millions in its mining activities, through Richmont Mines, then the Monarques Gold Corporation. The two heavyweights, however, dropped Gildan Sportswear Inc., which he ran with his brother Glenn, for ethical reasons.
The Caisse de depot et placement du Québec divested from the company last November. The financial institution did not explain its decision, but CEO Charles Émond had said a few months earlier that it could revise its investment in the company if it did not pay its fair share of taxes. In 2021, Gildan’s average effective tax rate was 2.8%.
For its part, the Fonds FTQ dropped Gildan in 2003, after revelations about the company’s anti-union practices in Honduras. Greg Chamandy stepped down as CEO of the company the following year to make way for his brother Glenn.
As for Investissement Québec, the Crown corporation granted its last loan to Gildan during the 2002-2003 fiscal year.