Former Kleenmaid director found guilty of fraud and insolvent trading after a 59-day trial
On 10 January 2020, former director and founder of the Kleenmaid group of companies, Andrew Eric Young, was found guilty in the District Court of Queensland on 19 charges arising from the collapse of the national white goods distributor.
Following a trial lasting 59 days, the jury found Mr Young guilty of:
- one count of fraud by dishonestly gaining loan facilities from Westpac in November 2007 totalling $13 million;
- two counts of criminal insolvent trading of debts of $3.5million relating to two additional loan facilities from Westpac in July 2008;
- 15 counts of criminal insolvent trading of debts amounting to more than $750,000 that were incurred during the period October 2008 to April 2009; and
a further count of fraud by dishonestly causing $330,000 to be removed from a Kleenmaid company bank account just prior to administrators being appointed and transferred to a bank account held by a company in which Mr Young held an interest and from which he and his wife would benefit from the payment.
The guilty verdict comes after similar court action against Kleenmaid directors Gary Collyer Armstrong, sentenced to five and a half years jail, and Bradley Wendell Young, sentenced to nine years imprisonment (16-257MR).
‘The action ASIC has taken against the former directors of Kleenmaid should send a clear message that where a director fails in their duty to prevent a company from incurring debts while it is insolvent, ASIC will take action, particularly where the director’s conduct has been dishonest and to the detriment of creditors and consumers,’ said ASIC Commissioner John Price.
Bail was refused and Mr Young was remanded in custody pending sentencing on 7 February 2020.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions after a referral from ASIC.
Kleenmaid was a white goods importer and retailer which operated a chain of company and franchised stores across Australia. The business was founded by Andrew Young in 1980.
Administrators were appointed to the Kleenmaid group of companies on 9 April 2009. The consolidated debts of the Kleenmaid group amounted to approximately $96 million, which included $26 million in customer deposits that had been paid for appliances yet to be delivered.
In August 2015, Gary Collyer Armstrong, pleaded guilty to one count of fraud and two counts of insolvent trading in relation to the collapse of Kleenmaid (15-225MR).
A trial against Andrew Young and his brother Bradley Young commenced on 4 April 2016. On 26 April 2016, the trial was discontinued against Andrew Young.
On 12 August 2016, Bradley Young was sentenced to nine years imprisonment for fraud and a total of three and a half years imprisonment for insolvent trading charges (16-248MR). Bradley Young, who is not eligible for parole until November 2022, has appealed his conviction and sentence. Judgment has been reserved for a decision.
The trial in relation to Andrew Young commenced again on 28 August 2017, however on 20 October 2017, Judge Devereaux discharged the jury due to the health of Mr Young (14-064MR).
Published by Australian Securities & Investments Commission (ASIC)