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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.
Mr 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 Mr 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.
At the time the offences were committed, Mr 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 Mr 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, Mr Young was aware of the dramatic loss-making and indebtedness of the Kleenmaid Group. The Crown’s evidence was that Mr 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 approximately $96 million which included $26 million in customer deposits that had been paid for appliances yet to be delivered and that Kleenmaid’s balance sheet deficit was approximately $83 million.
In passing sentence, Judge Farr said ‘…insolvent trading…can 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.’