THG has taken its Australian business partner to the High Court over claims of unpaid bills.
The ecommerce group took the dispute to court last September to pursue alleged unpaid invoices worth £1.4m owed by Nutrition Depot, The Telegraph reported.
THG argued the Queensland-based company, which had been its exclusive distributor of MyProtein products in China and Macau, had breached its distribution contract by not settling the invoices.
However, Nutrition Depot claims it did not receive the goods in question and accused THG of being complicit in an alleged Chinese tax fraud scheme.
THG said the accusations were “incoherent, inadequately particularised and, in places, nonsensical”.
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Nutrition Depot claimed to the Commercial Court that THG was aware of a plot by a group of Chinese companies to avoid customs import duty and sales tax.
It said it had an agreement to supply ten Chinese businesses it refers to in court documents at the “Dalian Group”.
Nutrition Depot claimed that someone in THG’s marketing team had worked “in conjunction” with the Chinese companies to “order overseas goods in small quantities and in multiple batches using special order codes that he provided to the Dalian group”.
The deal was allegedly to avoid taxes on the imports as parcels being shipped directly to individuals worth less than 300 yuan (£33) are exempt from fees.
Nutrition Depot claimed the Chinese companies then resold the protein, claiming that the London-listed company had “benefited from increased sales” as a result of the deal.
It claimed that THG senior managers were made aware of the situation.
THG has since issued a legal response, in which it denied any involvement in a scheme and breach of UK data rules.
The MyProtein owner said it “was not aware that any goods so ordered were for resale in avoidance of Chinese customs and taxes (if that was the case)” and denied partnering with the group of Chinese companies.
It added that it had not been contacted by Chinese authorities on this matter, with the claims against its marketing employee viewed as an attempt to discredit a witness in the case.
A spokesman for the company told The Telegraph: “THG is the claimant in this action, which we launched as a last resort to recover unpaid debts. We are extremely confident in our position and the claims made by Nutrition Depot are entirely without merit.”
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