By Grant Shepherd
Amid almost 200 pages of information regarding Kleenmaid’s dodgy practices, administrator Deloitte has highlighted that among other things, director Andrew Young spent almost $400,000 on boat expenses with Kleenmaid funds.
“We have identified an additional unreasonable director related transaction which resulted in payments by the group on behalf of director Andrew Young totalling $386,000 relating to boat expenses,” said John Greig, Deloitte joint administrator.
“These payments mainly comprise loan repayments to the financier of $18,000 per month and various miscellaneous expenses (i.e. boat fuel). We understand that these transactions were expensed in the group’s accounts and not recorded as a loan by the group to Andrew Young.”
As well as this it has been highlighted that Kleenmaid may have participated in ‘unfair preference payments’ which is when certain creditors get preference over others.
Deloitte reviewed 61,299 payments to creditors and related parties, and identified that out of this 12 are suspicious as being unfair preference. These 12 payments to creditors totalled $9.6 million and were all made six months prior to administration.
If this is proven by a liquidator then all creditors must return the benefit they received.
Two instances of uncommercial transactions were also mentioned. The first instance is when stock to the value of $118,000 was transferred from EDIS to franchise stores and the second is the sale of two vehicles from Orchard KM to the Blighs Trust for $61,000. These transactions are of concern due to the fact that no cash consideration was provided.
The other main point of interest to come out of the financial spending habits outlined in report on the Kleenmaid Group was the fact that a number of transactions have been carried out with the purpose of defeating creditors.
“We consider that a number of the transactions mentioned in the report had the effect of reducing funds available to creditors,” said Greig.
Overall there have been numerous questionable transactions carried out over the years by Kleenmaid and its directors, the fact that all these are now becoming public knowledge is undoubtedly going to anger the already irate creditors breathing down the neck of the failed business.