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22-114MR Former Chair, CEO and CFO of Bruck Textile Technologies charged with preventing recovery of employee entitlements
On 23 May 2022, Mr Philip James Bart and Mr Ronald George Johnson, the former Chair and Chief Financial Officer of Bruck Textile Technologies Pty Ltd respectively, appeared in Wangaratta Magistrates Court charged with one count each of preventing the recovery of employee entitlements. Mr Geoffrey Thomas Parker, the former Chief Executive Officer, previously appeared on the same charge on 21 March 2022.
Following an ASIC investigation conducted under the Serious Financial Crime Taskforce (SFCT) into Bruck Textile’s activities, it is alleged that Mr Bart, Mr Johnson and Mr Parker entered into a transaction on or about 10 July 2014 to sell the assets of Bruck Textile to a related entity, Australian Textile Mills Pty Ltd.
After the sale, Bruck Textile was considered insolvent and placed into liquidation on 11 July 2014, resulting in 58 employees losing their employment and access to entitlements, such as redundancy payments. It is alleged that Mr Parker, Mr Bart and Mr Johnson entered into the transaction to sell the assets of Bruck Textile to prevent or significantly reduce the amount of redundancy entitlements given to employees, estimated at over $3.48 million, in contravention of section 596AB of the Corporations Act 2001.
Bruck Textile’s former employees applied under the Commonwealth Fair Entitlements Guarantee scheme for payment of their entitlements after Bruck Textile’s liquidators found that the company did not have sufficient assets to pay them.
The matter is being prosecuted by the Commonwealth Director of Public Prosecutions.
The charges against Mr Bart, Mr Johnson and Mr Parker will be listed for a committal mention hearing on a date to be confirmed.
Bruck Textile Technologies Pty Ltd, incorporated on 29 May 1996, was a company based in Wangaratta that was engaged in textile manufacture.
At the time of the alleged offending, the maximum penalty for a breach of section 596AB of the Corporations Act was $170,000 or imprisonment for ten years, or both.
ASIC’s investigation was assisted by the receipt of a comprehensive report prepared by Bruck Textile’s liquidators. ASIC assisted the liquidators to investigate and report their findings by providing funding from the Assetless Administration Fund.
The SFCT is an ATO-led joint agency taskforce that brings together the knowledge, resources and experience of relevant law enforcement and regulatory agencies to identify and address the most serious and complex forms of financial crime. The current priorities of the taskforce include:
- cybercrime (technology enabled crime) affecting the tax and superannuation systems
- offshore tax evasion
- illegal phoenix activity and
- serious financial affecting the ATO-administered measures of the Commonwealth’s Coronavirus Economic Response Package.
Since its establishment on 1 July 2015, the SFCT has raised more than $1.492 billion in liabilities, convicted and sentenced 15 people and collected more than $575 million as part of its operations.
For more information on the SFCT, including the identikit outlining key financial crime personas, visit ato.gov.au/SFCT.