EXCLUSIVE: The raid on Halikos Group’s Darwin office early Wednesday was part of an extensive Australian Taxation Office investigation into allegations of tax fraud, high-level sources familiar with the investigation have told the NT Independent.

Numerous sources said the raid of Halikos Group’s office involved staff members’ bags being searched, photographs of the premises taken and ATO officials using company computers to transmit data back to an ATO office interstate.

The ATO agents also escorted staff to alternative sites owned by the company in the city to retrieve documents that some employees never knew existed, sources said.

It is understood that Tony Halikos’ company Steeline was also subject to a raid on Wednesday morning.

Halikos Group directors John Halikos and Shane Dignan did not respond to questions yesterday, including if their homes were also raided as part of the ATO investigation, as some have claimed.

Local industry sources said Mr Dignan attempted to downplay the raid in local business circles, reportedly claiming the investigation was nothing more than a regular “taxation compliance audit” at the construction giant that “other large companies” in the NT would also be subjected to in the coming weeks.

The NT News reported that assertion, without attribution, while also claiming the “ATO contacted Halikos’ accountants KPMG and advised them to prepare for an audit, which came on Wednesday morning”.

KPMG local director Derek Campbell did not return the NT Independent’s calls yesterday attempting to verify that claim.

“I’ve never heard of an audit where 20 ATO officers show up,” one source with knowledge of the raid said.

“They were taking photographs, they were going through desks and using computers to send data [interstate].

“John and Shane were in the boardroom with 10-15 ATO officers standing over them”.

The raid came days after former Halikos Group chief financial officer and current general manager of corporate services Steve Brunker had returned to town from a reported extended leave.

An ATO spokeswoman would not comment on the information gathering operation.

“The ATO cannot comment on the tax affairs of any individual or entity due to our obligations of confidentiality under the law,” she said.

Halikos Group was formed in 1987 and is one of the largest employers in the Northern Territory with business interests in construction and development, hospitality, manufacturing, property management and real estate.

Local industry sources said a fallout between Mr Halikos and Mr Dignan in recent years was well-known, with reports the two men were operating different parts of the business separately while keeping the company together.

In 2018, the construction giant lost a massive lawsuit against international gas giant Inpex, in which Mr Dignan and Mr Halikos sought close to $200 million in damages over a disputed accommodation agreement that was never signed.

It was a bitter trial that saw evidence provided by some of the Territory’s most powerful people, including former chief minister Adam Giles, who testified on behalf of Halikos.

Halikos Group and its subsidiaries have been generous political donors to both Territory Labor and the CLP for years.

Halikos lost its Inpex appeal in March 2020, when the NT Court of Appeal ruled their arguments “did not make sense” and were expected to pay Inpex’s legal costs and suffer its own losses, which put considerable financial strain on the company, that Mr Dignan claimed at the time would “not affect our day-to-day operations”.

The company also attracted controversy in 2017 when it was revealed the former Giles CLP government had given Halikos prime commercial property known as Berrimah Farm – now dubbed Northcrest – for free despite another company bidding $30 million for the land. The Auditor General raised questions about the deal which resulted in a non-investigation by Labor’s public accounts committee that closed the matter despite evidence that infrastructure department officials had withheld probity information on the deal.

It was also revealed in 2018 that Halikos Group claimed millions of dollars through the NT Government’s flawed Indigenous Employment Provisional Sum scheme that the Auditor General found was “lacking in oversight and accountability” and which saw other, smaller companies involved charged with fraud for stealing millions from the government through false Indigenous employment figures.

The ABC reported at the time that Halikos Group was the only company involved in the program that had been given on-costs to cover overhead expenses through the scheme by the government that was not offered to any other company.

In a remarkable turnaround in recent years, Halikos Group was the winning bidder on major Labor Government projects including construction of the new $55 million youth detention centre at Holtze, as well as the massive $250 million Charles Darwin University city campus development.

It was also awarded the $25 million contract to rebuild the Casuarina pool by the City of Darwin and received millions through various NT Government COVID-19 stimulus grants.

“Our values come from our people, both management and staff,” Halikos Group states on its website.

“People make a company what it is.”

Note: This story was edited to correct that Steeline was raided on Wednesday morning, not Thursday as originally indicated.