The multimillion-dollar collapse of the Sydney based Lifestyle Store with debts of over $20M and the7 store Theatre At Home business, that has liabilities of over $10 million appear to be heading to the courts and if it happens, front and centre will be the actions of two senior executives former CEO Vinod David and John Kranatis.

The business has been described as the biggest AV and Audio Company in Australia by News Corp.

Over 1,000 consumers who paid deposits and never got what they ordered are now asking where the missing millions in payments went.

Questions are also being asked about where the payments for stock that was being sold prior to the collapse of The Lifestyle Store went with the business offering 70% discounts, with customers telling ChannelNews that they were asked to pay cash to get a discount.  There is also an issue over the purchase of a $600,000 Porsche Turbo motor vehicle and vehicles for the wives of senior management.

Former CEO Vinod David left and and John Kranatis a director of Lifestyle Store Australia Pty Ltd and a key executive in The Lifestyle Store.

Insiders claim that the payments for goods which are in the tens of thousands never made it to the books of the business.

An investigation by ChannelNews reveals that questions are also being asked about missing money, the questionable transfer of monies between LSS (Lifestyle Store) TAH (Theatre At Home)  as well as claims made to Westpac to get loans for The Lifestyle Store.

Both Vinod David and John Kranatis are directors of a business that as of 22nd of September 2023 owned 63% of the shares in Lifestyle Store Australia Pty Ltd.

The entity owning the 63% shareholding was LTR Group Pty Ltd which lists Vinod David and John Kranatis as the sole shareholders.

Back in 2022 and 2023 the Lifestyle Store that was struggling to get credit and had resorted to using credit cards to pay suppliers, and when credit started to run out on the Companies credit cards, they got staff to use their credit cards to pay for goods and services for the business.

Jozef Banati, the former director of technology at LSS, was so desperate to get his money back that Vinod David and the Lifestyle Store had put on his credit card that he engaged a solicitor to try and get the debt paid off.

In a letter written by his solicitor he pointed out that LSS had racked up $50,385.65 in unreimbursed business expenses on his credit card.

Vinod David who had already run out of credit, or the ability to raise any borrowings, offered to pay this amount by way of a 39-week payment plan.

“This payment plan is not accepted” the solicitor wrote.

We also understand from documents prepared by a potential investor who was given access to the books of both the Lifestyle Store and Theatre at Home reveals that Westpac given to the bank in March 2023 indicated the Company was profitable with net assets of $1.46M.

They were also told that LSS was carrying inventory stock levels of $8.8M and had receivables of $2.1M.

A year later a balance sheet review revealed that losses were over $14M.

A major player in the collapse of the Lifestyle Store and Theatre At Home is Danny Assabgy the CEO of Equiti, and a director of Danwa Pty Ltd,  ROQO Pty Ltd that ended up owning the assets of the Lifestyle Store Pty Ltd.

He loaned TAH $5M and realising that he had invested in a questionable business tried to find an investor to buy out his TAH loan or to buy the business outright.

When this failed and as Vinod David and John Kranatis were desperately chasing new money for parent business LSS, Assabgy moved to secure additional LSS assets.

Following discussion with Assabgy and another potential investor, who they hoped would fund the struggling Lifestyle Store, management signed over the assets of the LSS in an effort to get access to new borrowings.

The assets of LSS were agreed to be sold to Roqo well before any introduction of an investor and only came about as a result of what has been described as unauthorised loans being made from TaH to LSS.

At the time access to the Companies financials had been suspended by Oracle because of nonpayment of their monthly accounting package subscription. When this was restored, the investor suddenly realised the true state of the business.

Vinod David told ChannelNews recently that he believes he was misled, and that the “documents are not a genuine reflection of events” despite the fact that he made multiple changes to the document, signed the document and allowed an assets transfer to take place without any reference to the transfer of assets being subject to an additional loan of $2M which Vinod David is claiming and other parties are disputing.

“We have seen the Meta data for the documents, which allowed them to seize the stock and it has a different date” he claims.

He initially said that he would talk to us “To give his side of the e story.”

He failed to turn up for two meetings. “.

He then said that “His” administrator had told him “not to do any interviews” and that he had a letter to that effect.

When we asked to see the administrators’ letter, he said he would email it to us. We never got it.

Documents seen by ChannelNews and signed by Vinod David, clearly show that he signed an Asset Sale Agreement which we have been told, two separate administrators have seen and have accepted as having been signed by Vinod David and are legally binding.

Now suppliers, who have claims to over $1.5M dollars’ worth of stock supplied to LSS want to know what claims they have over the goods which are being held by Greys online.

Vinod David Lawyers have supplied the administrator with a list of stock which they claim was in the store when the LSS was placed into liquidation, the list was generated by Vinod David.

The value of that stock is $8,035.799 retail or $5,364,263 at cost according to a spreadsheet we have in our possession.

He claims that he got access to the store after the business was placed into administration, to do an audit and that he had records of what was in the store prior to administrators being appointed.

The list was also prepared after weeks of rampant 70% discounting.

We have been told that Vinod David using the excel spreadsheet that listed the assets in detail lodged a claim with an insurance Company, we are also told that no receipts for the purchase of $5m dollars-worth of stock were supplied as part of the claim.

Vinod David is claiming theft of these assets due to the actions of Danny Assabgy, as an agent of Danwa.

ChannelNews understands that after an investigation by the Insurance Company, they are refusing to accept the claim, and appear to have backed the transfer of assets from the Lifestyle Store to Danny Assabgy Companies as being based on legal documents.

Questions are also being asked as to how LSS who had no credit other than credit cards and the occasional credit from suppliers, was able to rack up over $5M is asset purchases.

Why if they had stock on hand were they not able to facilitate orders for customers who had paid them over a million dollars for goods and services.

Why were LSS executives and their staff telling customers that they were “waiting on stock from suppliers” with some customers waiting over 12 months for goods and the supply of a home theatre or custom installation.

ChannelNews has that list and several orders listing stock to be supplied to customers.

A check with suppliers reveals that in several cases the goods would have been delivered immediately or up to two months after an order was placed.

Recently Vinod David lawyers wrote to the administer of LSS claiming  that the loan agreements referred to in the Asset Sale Agreement between ROQO and Life Style Store (Australia) Pty Ltd (LSSA) were to be part of a suite of transaction documents that Danny Assabgy and a separate investor were required to fulfil as part of a further $2 million in funding to be provided, ultimately to TAH, through the newly incorporated LSSA business that Vinod David and John Kranatis ,were the sole directors of.

The lawyer acting for the pair claim that the documents were ‘draft’ Asset Sale Agreement between ROQO and LSSA that purports to record the sale on 6 March 2024 to LSSA of the assets which ROQO purportedly purchased from LSS on 11 September 2023. The metadata for both draft Asset Sale Agreements discloses that they were created on 5 March 2024 and substantially edited on that day.

That second Asset Sale Agreement that Vinod now purports to sell the Roqo assets to LSSA was never executed as no new investment was secured.

They Claim that the funding was never provided and instead on 10 April 2024, Mr Assabgy and Danwa Pty Ltd (Danwa), without any legal basis, took steps to take possession of the stock and premises of LSS.

This subsequently led to Nicols + Bain being appointed as administrator of TAH and ROQO, and the provision of the questionable Asset Sale Agreement.

They have described these actions as being a misleading or deceptive representation as to the validity and operation of the document, despite the documents only being signed by Vinod on behalf of LSS, TaH and Roqo

The lawyers claim that ‘In part that the Asset Sale Agreement, and an asset sale agreement between ROQO and Lifestyle Store (Australia) Pty Ltd (LSSA) were to be part of a suite of transaction documents that Danny Assabgy and another potential investor had drawn up as part of a deal to further fund the business with an additional loan of $2M.

They claim the documents were draft only, which is why Roqo remains as the owner of the assets.

Vinod David in a telephone call to ChannelNews claimed that he did not realise what he was signing and that he thought that the documents would only be activated once further funding of $2 million was provided.

His lawyers claim funding was never provided and instead on 10 April 2024, Assabgy and Danwa Pty Ltd (Danwa), without any legal basis, took steps to take possession of the stock and premises of LSS, with the subsequent appointed Nicols + Brien as administrator of TAH and ROQO.

Vinod David claims that Assabgy provided the administrators with the Asset Sale Agreement on the basis of what appears to be a misleading or deceptive representation as to the validity and operation of that document.

There was no mention of the liquidity problems of the Lifestyle Store, or the millions owed to customers who had paid deposits and never got what they paid deposits for.

ChannelNews spoke to Danny Assabgy who is owed millions, and he has a totally different story.

Tomorrow, we will bring you the second half of the story relating to the collapse of The Lifestyle Store or Theatre At Home as well as how Assabgy ended up controlling the stock which Vinod David is trying to claim, questions have also been raised about the so called $8M in stock which Vinod David was hoping to get paid out for to fund his administrator. This was a desperate Company who even took out loans at 80% interest at one stage.

Currently administrators are waiting on a full asset listing of the LSS stock which was removed from the Lifestyle Store to a secure Greys Online warehouse, that list is expect in days.

 

We also understand that Vinod David sent an email to Danny Assabgy  2 days after Danwa took possession of the assets to try and get him to sell the stock to a Melbourne based retailer who also has a retail store.