ASIC says directors should take Kleenmaid verdict as warning
AUSTRALIA'S corporate watchdog has warned company directors to take note of last week's nine-year jail sentence for a former Kleenmaid boss convicted of fraud and insolvent trading.
Bradley Wendell Young, 49, faced trial following an Australian Securities and Investments Commission investigation that focused on the solvency of the Kleenmaid Group, a Sunshine Coast based whitegoods group, and a corporate restructure undertaken in September 2007.
Young must serve six years and three months of his nine-year jail sentence before he will be eligible for parole.
During sentencing, Judge Brad Farr said insolvent trading could wreak havoc on a business community and Young had "showed a callous disregard for the fortunes of those affected by your behaviour in risking other people's money in extraordinary amounts".
ASIC commissioner John Price said: "This is a strong endorsement of ASIC's case, highlighting the severity with which such behaviour should be viewed and should send a signal to all directors and companies that we will pursue them through the courts when they break the law".
Young was convicted of fraud for dishonestly gaining loan facilities from Westpac Bank in November 2007 totalling $13 million and two counts of insolvent trading when he successfully sought a further $3.5 million in loans in July 2008.
The jury, after a 71-day trial, also found him guilty of 15 counts of criminal insolvent trading for further debts totalling more than $750,000 that were incurred between October 2008 to April 2009.
The court heard by the time administrators were appointed on April 9, 2009, Kleenmaid's consolidated debts had reached about $96 million, including $26 million in customer deposits for appliances yet to be delivered.
Kleenmaid's balance sheet deficit was about $83 million.
A trial date is yet to be set for former director and founder of Kleenmaid Andrew Eric Young; Bradley Young's older brother. - ARM NEWSDESK