By Claire Reilly
The former directors of Kleenmaid appeared in the Maroochydore Magistrates court in Queensland today, faced with criminal charges brought by the Australian Securities & Investments Commission, relating to the collapse of the disgraced appliance company.
Kleenmaid founder Andrew Young and co-directors Bradley Young and Gary Armstrong made their first appearance before Magistrate Walter Ehrich. All 3 men were faced with 18 counts of failure to prevent a company incurring a debt at a particular time, while the Young brothers also each faced 2 additional counts of fraud.
Current.com.au has learned that during the brief appearance, the former directors did not enter pleas and the case was adjourned until 17 May 2011. Each man was put on bail with orders not to contact prosecution witnesses or to make plans for international travel without advising the Commonwealth Department of Public Prosecutions.
Andrew Young spoke briefly to Current.com.au today, saying that he was unable to discuss the legal proceedings.
“I don’t have any comment,” he said. “I’ve been instructed by my barrister, he’s the only one who can comment.”
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Today’s legal action is the latest chapter in a sordid history for the company, which went into voluntary administration in April 2009, originally citing pressures from the 2008 global financial crisis for the move.
However, over the following months it emerged that the company owed millions of dollars to creditors and consumers, while the company’s administrators, Deloitte, claimed that Kleenmaid had been trading whilst insolvent for more than two years before it officially folded.
In a report released by Deloitte in May 2009, the administrators alleged that “the Group [Kleenmaid] could not possibly have such a significant deficiency by reason of events that occurred in the weeks preceding our appointment as administrators”.
The administrators also found evidence of crooked accounting practices, including “boat expenses” of almost $400,000 being written into the Kleenmaid books by Andrew Young. In addition, Deloitte confirmed in May 2009 that police had been called to the company’s head offices in Maroochydore to prevent the Young brothers from removing sensitive company records from the site.
Current has followed this story closely since it broke, and will continue to update readers as the story develops.
For a concise history of the company's collapse, click here. And to read Current's coverage of all Kleenmaid news, click here.