Kleenmaid directors to face investigation

Kleenmaid's cash-flow problems stretched back at least two years, with the group having a net asset deficiency of $20 million in June 2007, according to a report by the liquidators. Directors Andrew and Brad Young and Gary Armstrong could be held personally liable for the group's debts and face criminal charges with jail terms of up to five years if the insolvent trading claims are proved.

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

Kleenmaid.jpg

ASIC probe … Kleenmaid directors Andrew (left) and Brad Young. Photo: Glenn Hunt

Kleenmaid directors to face investigation
Daniel Hurst

Australia's corporate regulator has agreed to fund an investigation into the Kleenmaid collapse that could pave the way for charges to be laid against the group's former directors.

The 14 companies in the group went into voluntary administration in April, leaving in the lurch thousands of customers who had paid deposits or the full cost of kitchen and laundry products that never arrived. Creditors voted to wind up the group the following month.

brisbanetimes.com.au this morning revealed the Australian Securities and Investments Commission had approved the liquidators' request for cash from its assetless administration fund.

Deloitte partner Richard Hughes later confirmed the decision.

The funding will allow liquidators of the Sunshine Coast-based appliance seller to move forward with their investigations into allegations the Kleenmaid Group was trading while insolvent for two years.

"This funding approval marks the beginning of the next crucial stage of the liquidation process," Mr Hughes said in a statement.

"The investigation will focus on insolvent trading."

Kleenmaid's cash-flow problems stretched back at least two years, with the group having a net asset deficiency of $20 million in June 2007, according to a report by the liquidators.

Directors Andrew and Brad Young and Gary Armstrong could be held personally liable for the group's debts and face criminal charges with jail terms of up to five years if the insolvent trading claims are proved.

Liquidators asked ASIC for support after concluding the group had a net debt of at least $82 million.

The Kleenmaid liquidators will gather evidence and prepare a report to help ASIC decide whether to lay charges. The findings could also be used as the basis for civil action.

ASIC and Deloitte declined to comment last night on the funding decision.

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http://www.brisbanetimes.com.au/business/kleenmaid-directors-to-face-investigation-20090924-g4k5.html


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