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Thursday 16 February 2012

12-27AD ASIC brings criminal charges against former Kleenmaid directors

Three former directors of national whitegoods distributor Kleenmaid faced court today accused of 20 criminal charges including a $13 million fraud and insolvent trading, following an ASIC investigation.

Andrew Eric Young, Bradley Wendell Young and Gary Collyer Armstrong appeared before Magistrate Ehrick at Maroochydore Magistrates Court for their first appearance. The trio have been charged with 18 counts of criminal insolvent trading of debts totalling more than $4 million and a $13 million fraud committed on Westpac Bank.

Gary Armstrong and Andrew Eric Young have also been charged with further fraud, accused of withdrawing $330,000 from the company’s bank accounts two days before it went into voluntary administration.

The focus of ASIC’s investigation centred on the solvency of the Kleenmaid Group and a corporate restructure undertaken by the Kleenmaid directors in September 2007. ASIC alleges the Kleenmaid Group continued to trade despite becoming insolvent from March 2008.

The former directors were not required to enter a plea and have been released on conditional bail.

The matter returns to Maroochydore Magistrates Court for mention on 17 May 2012.

The Commonwealth Director of Public Prosecutions is prosecuting the matter.

Background

Each of the criminal insolvent trading charges under section 588G(3) of the Corporations Act 2001 (the Corporations Act) carries a maximum penalty of $200,000 or imprisonment for 5 years or both.

Andrew Young, Bradley Young and Gary Armstrong face one count of fraud committed on Westpac Bank.

Gary Armstrong and Andrew Young face one count of fraud relating to the $330,000 withdrawal from the company bank accounts.

Each of the fraud charges under section 408C of the Criminal Code (QLD) carries a maximum penalty of 12 years imprisonment.

Based on Queensland’s sunshine coast and employing about 200 staff, the Kleenmaid group of companies operated the Kleenmaid brand of kitchen appliances and was an importer and distributor of whitegoods, operating 22 outlets Australia-wide including 15 franchise stores and 7 company-owned stores.

The former directors appointed voluntary administrators on 9 April 2009 with liquidators reporting Kleenmaid Group had consolidated debts of $97 million, including $26 million in customer deposits.

Editor's note 1:

On 17 May 2012 at Maroochydore Magistrates Court the matter was adjourned until 21 June 2012 for a further mention at Maroochydore Magistrates Court.

Editor's note 2:

On 21 June 2012 at Maroochydore Magistrates Court the matter was adjourned until 20 September 2012 for a further mention at Maroochydore Magistrates Court.

Editor's note 3:

On 20 September 2012 at Maroochydore Magistrates Court the matter was adjourned until 18 October 2012 for a further mention at Maroochydore Magistrates Court.

Editor's note 4:

On 18 October 2012 at Maroochydore Magistrates Court the matter was adjourned until 2 November 2012 for a further mention at Brisbane Magistrates Court.

Editor's note 5:

On 2 November 2012 at Brisbane Magistrates Court the matter was adjourned until 4 February 2013 for a further mention at Brisbane Magistrates Court.

Editor's note 6:

On 21 February 2013 at Brisbane Magistrates Court the matter was adjourned until 4 April 2013 for a further mention at Maroochydore Magistrates Court.

Editor's note 7:

On 4 April 2013 at Maroochydore Magistrates Court the matter was adjourned to 20 June 2013 for mention.

Editor's note 8:

The matter was mentioned in the Maroochydore Magistrates Court on 13 June 2013 where it decided the matter would be listed for a 3 week committal hearing in the Maroochydore Magistrates Court, starting 18 November 2013.

Editor's note 9:

The committal hearing for three former directors of Kleenmaid started on Monday, 18 November 2013. After hearing evidence from a number of witnesses over the next three weeks the committal hearing was adjourned to Monday, 17 March 2014 where it is expected the remaining witness will be cross examined. At the conclusion of the committal hearing, the magistrate will determine if there is sufficient evidence for the former directors to be committed to the District Court for a trial.

The former directors have not been required to enter a plea and have been released on conditional bail.

Editor's note10:

The committal hearing is to resume in the Maroochydore Magistrates Court on Monday 31 March 2014 until 4 April 2014.

Last updated: 01/04/2014 12:00