A Greek Australian led Sydney subcontractor that works on major NSW government jobs has collapsed.

According to AFR, M2 Sustainable Services trading as Metsquare 2, whose director is eco-tech investor Kirk Tsihlis, owes millions of dollars in taxes.

Last Friday the Australian Taxation Office (ATO) forced the company into liquidation over $6.7 million owed in GST and Pay As You Go tax.

The company had taken over the contracts and employees of Metsquare, which was backed by Tsihlis’ investment vehicle, after the latter company went into administration in 2023 owing $23 million in taxes.

This brings it and its related entities’ total tax debt to almost $30 million in just four years.

Some of the government projects the Metsquare companies did work on included the Victoria Cross Metro Station and Wyong Hospital, and according to court documents, it was working on Sydney Children’s Hospital and Westmead Children’s Hospital.

It’s latest iteration also had $13 million in contracts under way, plus upcoming contracts with government agencies.

Industry sources said another Tsihlis-backed company was working on a state government hospital project in western Sydney but Tsihlis said he has now exited that company.

Tsihlis said the latest tax debt with Metsquare 2 (now called Precision Cut Services Australia) was due to “trading losses”.

“We tried to negotiate with the ATO regarding those [tax debts],” he said.

“We made significant payments and asked for further time and couldn’t make it work. If anything you’ve got very difficult trading conditions and you’ve got a tax office that is absolutely vigilant and makes it very hard to operate.”

His group is now “exiting completely” its positions in the formwork sector as it was “way too tough”.

“We have made losses in this space, as has most of the industry,” he said.

He added that Metsquare 2, which is party to a deed to pay just 8.9¢ in the dollar of Metsquare’s $23 million tax debt, was still in talks with the ATO.

Industry sources said that another Tsihlis related company, Equipmet, was being considered for work on a Cumberland Hospital project.

Tsihlis was director of Equipmet until January 31, according to a backdated ASIC filing on February 20, and was replaced by an employee of Metsquare.

Tsihlis said he had exited the company entirely “weeks ago” but when told that the ASIC records showed his company Halifax Central still had a 50 per cent financial interest, he said: “It should have been updated. I’ll ask my accountant why it hasn’t.”

Transport NSW investigation

This comes as last month the NSW opposition questioned the government approving another Tsihlis-backed company, GoZero, to supply it with 126 electric buses.

This was due to Tsihlis’s history with companies defaulting on tax.

GoZero has recently agreed to sell for about $400 million.

Minister for Finance Courtney Houssos said the GoZero company that won the contract did not have Tsihlis as a director and told parliament on February 20 that Transport for NSW was investigating the matter.

Shadow treasurer Damien Tudehope said he was surprised the minister for domestic manufacturing and government procurement was not aware of Tsihlis’s involvement.

Tsihlis accused the opposition of making “factually incorrect statements … for political point-scoring under the veil of parliamentary privilege”.

He said he was a shareholder, not a board member.

“I haven’t been in GoZero Group for a long time,” he said.

“I’ve been a passive shareholder since inception – we’ve invested money in GoZero. That’s our job. We invest in early stage businesses, across a lot of spaces, and if they work and are successful we get out of that.”

Transport for NSW is said to be in the final stage of investigations.