For fraud and insolvent trading.
Former Kleenmaid director, Bradley Young (pictured) has been found guilty of fraud and 17 counts of insolvent trading but not guilty of one count. The sentence took place at the Brisbane District Court on Friday, after one of the longest criminal trials in Queensland that began in April.
Young was found guilty of the fraud charge, which related to a $13 million Westpac bank loan.
Prosecutor Stephen Keim said Young and other directors knew about the financial state of the Kleenmaid companies, but the true financial situation was not revealed to Westpac when applying for a $13 million loan in 2007, according to an article in the Courier Mail. There was an inability to pay staff on time and compulsory superannuation was not being paid.
Keim said five months before the $13 million loan, a Kleenmaid accounting consultant emailed Kleenmaid director Gary Armstrong that the business was $68 million in debt. He said all three directors were given monthly reports by accounting staff.
A bail application was denied and sentencing will take place at a later date.
Kleenmaid, based in Maroochydore, employed about 200 people in 22 outlets across the country but went into voluntary administration in early 2009. It later went into liquidation owing creditors $96 million.
In October 2015, former Kleenmaid director, Gary Armstrong was sentenced to seven years in jail for fraud and insolvent trading. In August, Armstrong pleaded guilty to one count of fraud and two counts of insolvent trading relating to the company’s collapse in 2009.
In sentencing, Judge Brad Farr told Armstrong he played “a vital and intrinsic role” in the offences but acknowledged he was subservient to the other directors. He will be eligible for parole after serving two years and four months of his sentence.
In April 2009, Kleenmaid entered voluntary administration, appointing Deloitte partners as administrators.
Later that year, Compass Capital Partners acquired the Kleenmaid brand and in February 2010, the new Kleenmaid brand, with no direct association to the company in liquidation, opened a Direct Clearance Centre at Banksmeadow in Sydney’s south.