ASIC funds Kleenmaid investigation

Insolvent and dishonest trading can attract a jail term of up to five years and a fine of $220,000, as well as disqualification as a company director. Kleenmaid went into voluntary administration in April, with 150 staff losing their jobs, five Kleenmaid-owned stores closed and hundreds of customers were left out of pocket.

http://www.wabusinessnews.com.au
September 25, 2009

ASIC funds Kleenmaid investigation

The directors of failed white goods business Kleenmaid could face up to five years in jail if it is proved they traded dishonestly and insolvently, as the corporate watchdog approves funding for an investigation.

Liquidator Richard Hughes, from Deloitte, said the investigation would focus on insolvent trading.

"We will provide a detailed report to ASIC and then it is their decision whether or not they will bring a criminal case against the directors," Mr Hughes said in a statement on Friday.

"At the same time the liquidators will use the findings of the investigation as the basis for any civil action that we may bring to recoup monies on behalf of creditors."

Mr Hughes said an update on the investigation would be provided in the next few months.

Insolvent and dishonest trading can attract a jail term of up to five years and a fine of $220,000, as well as disqualification as a company director.

Kleenmaid went into voluntary administration in April, with 150 staff losing their jobs, five Kleenmaid-owned stores closed and hundreds of customers were left out of pocket.

Creditors agreed in May to wind up and liquidate the Kleenmaid Group after it was found to have debts of more than $80 million.

Kleenmaid director Andrew Young, who co-founded the company with his brother Brad, said in a statement today he was disappointed ASIC had taken the action.

"We do not believe there is sufficient evidence to warrant any further investigation into the failure of the business," Mr Young said.

"We would like to again express our sincerest sympathies to our customers and creditors who are facing financial loss as a result of the company's failure.

"In hindsight, we acknowledge we could have done better in dealing with the global financial crisis and the enormous pressure it placed on our business but reject any notion the business traded while insolvent.

"We will continue to cooperate with all relevant authorities."

http://www.wabusinessnews.com.au/en-story/1/75523/ASIC-funds-Kleenmaid-investigation


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