The liquidator of failed sports betting company Sports Alive has demanded $14 million compensation from TOTE Tasmania chief executive Craig Coleman and Victorian directors.
In a letter early this month, liquidator Hamish MacKinnon demanded the money be paid by December 14.
It is understood Mr Coleman has refused to pay and the TOTE Tasmania board has refused to discuss the situation.
TOTE spokesman Nick Turner confirmed Mr Coleman had received a letter from the liquidator.
"He has responded to the letter directly, strongly rejecting its claims," he said. "He has also referred the matter to the relevant authorities for further investigation given the outrageous nature of the claims levelled at Mr Coleman."
Mr Turner said there would be no impact on TOTE Tasmania because the claims were against Mr Coleman and other directors, not TOTE Tasmania.
The liquidator's compensation claim arises from the collapse of Sports Alive in August. The demand was based on pledges from Mr Coleman that TOTE would invest a further $5 million in Sports Alive in December last year.
Mr MacKinnon said that according to Victorian directors Sports Alive had only continued to trade because of the pledges from TOTE.
The letter alleged Mr Coleman had a conflict of interest in simultaneously being chairman of Sports Alive and chief executive of TOTE.
In a letter to all Sports Alive directors, Mr MacKinnon alleged: Sports Alive was trading while insolvent from June 2008, including the period under Mr Coleman's chairmanship. Sports Alive was in breach of the Race and Sports Betting Act by failing to keep punters' money separate from administrative funds. Directors had breached their duties and had failed to act in good faith in the best interests of the company.
The liquidator's letter claims that the failure to maintain segregated accounts resulted in punters being owed $3.8 million when the company collapsed in August, owing a total of $14 million.
In a letter to TOTE chairman Michael Kent, Mr MacKinnon alleged Mr Coleman had not tried to rectify the problems with the lack of segregated accounts and the alleged breach of the Race and Sports Act.
The liquidator informed TOTE it intended to make application to the Supreme Court of Victoria to publicly examine the directors of Sports Alive, as well as Mr Kent and other TOTE directors.