At the time of the deal, Skin Elements claimed in an ASX announcement that State Securities had a “long history in both property and equity markets and has an extensive network of high net worth individuals and [section] 708 qualified sophisticated investors”.
The announcement in April 2020 was followed by a 10-fold increase in the share price of Skin Elements, amid speculation that international distribution deals had been finalised.
But in January 2021, State Securities was informed that more than 91 million options had not been exercised and it was now obliged to pay Skin Elements $9,101,870.
State Securities has paid just $500,000, with about $8.6 million outstanding. However, Mr Karas, who was declared bankrupt in 2015, has a poor record of settling debts.
He owes almost $67 million to the Tax Office, according to a creditors report by Pitcher Partners from May 2020, after battling with authorities for more than a decade over the source of his wealth.
In 2011, the ATO won a Supreme Court judgement against Mr Karas that ordered him to pay $21 million in taxes on unexplained income and assets, some of which were allegedly derived from business dealings with the Mokbel drug empire.
Mr Karas, who was named by the Purana anti-gangland taskforce as a “primary person of interest” in Melbourne’s organised crime scene, has also been accused of laundering millions of dollars through the stolen identity of his cousin Christos Karaglanis, an olive picker and taxi driver in Greece.
Mr Meletsis also has a colourful past that is at odds with his company’s role in a multimillion-dollar deal with an ASX-listed company.
His former business partner Lou Jovanovski alleged in court documents that Mr Meletsis attacked him with a baseball bat.
The pair had previously operated the James Squire Hotel in Docklands before falling out over a disputed debt of $540,000.
In court documents, Mr Jovanovski alleged Mr Meletsis beat him with a baseball bat after forcing him to pick one of three handwritten envelopes labelled “baseball bat”, “claw [hammer]” and “apology”.
Mr Meletsis has been repeatedly accused by liquidators of other companies of concealing assets or acting as a “straw director” on behalf of Mr Karas.
A spokeswoman for the Australian Securities and Investments Commission declined to comment.
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Senior Crime Reporter