NINE YEARS JAIL FOR FORMER KLEENMAID BOSS WHO SHOWED 'CALLOUS DISREGARD' FOR VICTIMS

NINE YEARS JAIL FOR FORMER KLEENMAID BOSS WHO SHOWED 'CALLOUS DISREGARD' FOR VICTIMS
A FORMER director of one of the Kleenmaid group of companies. Bradley Wendell Young was sentenced to nine years' imprisonment last Friday after being found guilty by a District Court jury of 18 offences arising out of the collapse of the national whitegoods distributor.

Following a trial which lasted for 71 days, on 5 August 2016, the jury found Young guilty of:
  • one count of fraud by dishonestly gaining loan facilities from Westpac Bank in November 2007 totalling $13 million;
  • Two counts of criminal insolvent trading of debts totalling $3.5million relating to two additional loan facilities from Westpac Bank in July 2008; and
  • 15 counts of criminal insolvent trading of debts totalling more than $750,000 that were incurred during the period October 2008 to April 2009.

The jury found Young not guilty on one count of criminal insolvent trading.

Young was sentenced to nine years' imprisonment for the Westpac fraud and a total of three and a half years' imprisonment for the insolvent trading charges. The court ordered that Young's parole date in respect of the fraud be set at 5 February 2021 and for the insolvent trading charges was to be 21 months later.  

In passing sentence, Judge Farr said 'insolvent tradingcan wreak havoc on a business community' and 'you showed a callous disregard for the fortunes of those affected by your behaviour in risking other people's money in extraordinary amounts'.

At the time the offences were committed, Young was the Managing Director of EDIS Service Logistics Pty Ltd, which, following a corporate restructure in November 2007, was licensed to import, wholesale and retail Kleenmaid appliances. Prior to the restructure, EDIS had been the spare parts distributor for Kleenmaid appliances.

During the trial, the court heard that it was Young who proposed the plan whereby EDIS would obtain funding from Westpac to acquire inventory from Orchard KM Pty Ltd (formerly known as Kleenmaid Pty Ltd) which was the main trading company in the old Kleenmaid Group, and that at the time, Young was aware of the dramatic loss-making and indebtedness of the Kleenmaid Group. The Crown's evidence was that Young, along with fellow director Gary Collyer Armstrong, failed to disclose to Westpac that EDIS and Orchard KM did not trade at arms-length and concealed the serious debt position of Orchard KM.

The court also heard that by the time administrators were appointed to the Kleenmaid group of companies, on 9 April 2009, Kleenmaid's consolidated debts amounted to around $96 million, which included $26 million in customer deposits for yet-to-be-delivered appliances and that Kleenmaid's balance sheet deficit was around $83 million.

'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,' ASIC Commissioner John Price said.

Following a plea of guilty, in October 2015, Armstrong was sentenced to seven years' jail in relation to the $13 million Westpac fraud and the two Westpac criminal insolvent trading charges. Armstrong was one of the witnesses called to give evidence for the prosecution during Young's trial. Armstrong will not be eligible for parole until 2 February 2018.

A date is yet to be set in relation to the trial of the former Director and founder of Kleenmaid, Andrew Eric Young; Bradley Young's older brother.

The Commonwealth Director of Public Prosecutions prosecuted the matter.

Get our daily business news

Sign up to our free email news updates.

 
Unpacking equity: Finding your funding fit
Partner Content
Armed with a growing business and a great opportunity, a business owner’s next challe...
Australian Business Growth Fund
Advertisement

Related Stories

Meta slammed over "dereliction" of commitment to Australian news

Meta slammed over "dereliction" of commitment to Australian news

The decision by Meta (NASDAQ: META) to "deprecate" the Fa...

AF Legal acquires Armstrong Contested Wills & Estates in deal worth up to $3.75m

AF Legal acquires Armstrong Contested Wills & Estates in deal worth up to $3.75m

A year on from the failure of an $11 million merger with Go to Cour...

ASIC tips ‘ASX Wolf’ Tyson Scholz into bankruptcy over $500,000 in court costs

ASIC tips ‘ASX Wolf’ Tyson Scholz into bankruptcy over $500,000 in court costs

Social media ‘finfluencer’ Tyson Scholz, widely known a...

Ecofibre shareholders reject founder's nomination of Alex Keach to board

Ecofibre shareholders reject founder's nomination of Alex Keach to board

Shareholders in medicinal cannabis and hemp company Ecofibre (...