Liquidators say Yusuf Khan’s Library Nightclub was bust from 2019 with an unpaid tax bill

The Library Nightclub may have been insolvent from 2019 as fresh revelations suggest the Yusuf Khan-led business owed years of taxes. Liquidators for the company which ran the club — formerly known as Perth City Enterprises — allege the business “failed to pay” the Australian Taxation Office income tax for the 2019 financial year “and beyond”. Nicholas Giasoumi of Victoria’s Dye & Co told creditors the tax debt was a sign the business was insolvent in a report lodged with the corporate regulator on Thursday evening. Mr Khan was a director of both PCE and landlord Perth City Investments after buying the famed multi-storey Lake Street nightclub with partners in a 2017 deal reportedly worth $4.6m. His representatives rejected the estimated insolvency date. “The liquidator’s opinion is inaccurate,” a spokesman said. “The company has consistently complied with its obligations, including during the COVID period when many companies in Australia accrued ATO debt.” PCE collapsed in March — eight months after the failure of builder Modco Residential. Modco has been linked to Mr Khan and his partner Cynthia Lu. The latest liquidator’s report said PCE was sent under after receiving a default notice from Perth City Investments for unpaid rent and outgoings. Mr Khan’s spokesman said PCI was a creditor and owed “a large amount of rent”. Another company listed as a creditor was QN Holdings — a business linked to Mujtaba Abdul-Aziz, a former partner in the nightclub venture. Mr Abdul-Aziz exited as a director of PCI in 2020, months before he was hit by a Corruption and Crime Commission freezing order. Mr Khan’s spokesman said the QN debt was “an accounting error”. “QN Holdings is not owed any monies, as it was bought out in July 2019 for its 12.5 per cent interest and paid in full by the current shareholder of Perth City Enterprises,” he said. PCE owed nearly $2.3m, with the majority due to related parties. A $639,000 demand from the ATO on January 17 was also issued in the lead up to the company’s March demise, although the report says the tax office has only proved up debts of $525,000. Dye & Co’s analysis indicates PCE had assets of just $11,774 in cash at the time liquidators were brought in. PCI has so far retained ownership of the prominent Lake Street site, which was slated to reopen as Preach Nightclub and has been undergoing renovations. But The West Australian revealed in May that a bid to secure a liquor licence for the new nightclub had been withdrawn. The West had lodged a series of questions to regulators and Mr Khan about the nightclub’s business links, including those with QN Holdings. Regulators said Modco left 29 homes unfinished and corporate filings show debts of about $4.4m —with a company associated with Ms Lu, Ms Lu Holdings, claiming more than $2m.