Claim Kleenmaid money used for boat

Bradley Young was also the owner of five Kleenmaid franchises. Deloitte alleges there were $9.6 million in unfair preference payments, which elevated some creditors above others. The alleged beneficiaries were mainly suppliers. But there was also another $4 million in preference payments in the four years before the collapse which included $3.1 million to the England and Young Property Trust, of which Andrew Young is a beneficiary.

The Courier-Mail
May 20, 2009

Claim Kleenmaid money used for boat
John McCarthy

THE corporate regulator will investigate allegations that $380,000 may have been paid out of the accounts of the now-collapsed Kleenmaid towards a loan on director Andrew Young's personal boat as well as for expenses such as fuel.

Company administrators Deloitte have raised a series of issues with the Australian Securities and Investments Commission about the operation of the Sunshine Coast based company, which collapsed earlier this year with more than $100 million owing to creditors.

ASIC has received the report and is now looking at the allegations raised by Deloitte, which included possible insolvent trading, The Courier-Mail reports.

Deloitte - which will claim more than $1.2 million in fees for its investigation - alleges it found a "director-related transaction (that may have) resulted in payments being made by the (Kleenmaid) group on behalf of Andrew Young totalling $386,000 relating to personal boat expenses".

Deloitte said a liquidator would have to further investigate the claim, however Deloitte alleges that Young and his brother Bradley were also owed millions by Kleenmaid.

Bradley Young was also the owner of five Kleenmaid franchises. Deloitte alleges there were $9.6 million in unfair preference payments, which elevated some creditors above others. The alleged beneficiaries were mainly suppliers.

But there was also another $4 million in preference payments in the four years before the collapse which included $3.1 million to the England and Young Property Trust, of which Andrew Young is a beneficiary.

Deloitte also alleges that a series of transactions may have had the effect of reducing funds available to creditors and there may have been some uncommercial transactions that related to the sale of two company cars to a trust of which Bradley Young was a beneficiary.

Transactions to be examined in detail
Before Deloitte was appointed there were allegedly transactions which reduced loans owed to Kleenmaid by trusts linked to the Youngs.

Deloitte said it was also negotiating with warehouses where about $3 million in stock was stored. This stock is likely to go to auction.

While the Youngs claimed the global financial crisis was the cause of the collapse, Deloitte said there were significant other issues and a huge intermingling of funds in the web of companies under the Kleenmaid banner.

One of the companies also allegedly overstated how much money it was receiving but its company-owned stores had not been profitable since 2007.

Andrew Young was not available yesterday but earlier this week said he would not comment on the report.

"I'm working hard to find a solution for creditors and that's been my status position from day one," Mr Young said.

Report contradicts 'business as usual' comments
The damning report by Deloitte contradicts reassurances made by Mr Young who told news.com.au it was 'business as usual' at the whitegoods company even after it had gone into administration.

The comments sparked fury from Kleenmaid customers, left thousands of dollars out of pocket after the company's collapse.

Angry customers told news.com.au that the company made excuses about undelivered goods, while Kleenmaid employees said that they could see there were problems as early as mid-2008.

One franchisee told news.com.au that Kleenmaid were selling franchises as late as February this year, guaranteeing a return of $150,000 a year.

There will be a second creditors' meeting on May 25 at the Mercure Hotel in Brisbane.

http://www.news.com.au/business/story/0,27753,25510680-462,00.html


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