Former Kleenmaid director testifies against ex-partners
A FORMER Kleenmaid director has told a court the company refused to give Westpac financial records when an associated company was applying for a loan.
Gary Armstrong was called as a prosecution witness against his former business partners Andrew Eric Young, 62, and Bradley Wendell Young, 44, in the Brisbane District Court.
The Young brothers have pleaded not guilty to fraud and operating the former Sunshine Coast-based whitegoods company while it was insolvent.
Kleenmaid collapsed in April 2009 when major creditor Westpac Bank placed the company into administration.
The court has heard Westpac loaned Edis, Kleenmaid's spare parts arm, $13 million. The Youngs have been accused of deliberately not telling Westpac how intertwined Edis was with Kleenmaid and the precarious financial state Kleenmaid was in.
Mr Armstrong told the court on Tuesday that he spoke to Bradley Young before liaising with a Westpac officer to organise the loan.
As Edis had loaned money to Kleenmaid, Westpac asked to see Kleenmaid's financial records.
Mr Armstrong said he and the Young brothers met to discuss the request, and Andrew Young refused to open the company's books for the bank.
Mr Armstrong said he was not given the opportunity to respond in a meeting with the bank's liaison officer regarding the loan when asked if he had performed due diligence on the Kleenmaid companies.
"I had no opportunity to. He just skipped on to the next point," Mr Armstrong said.
Mr Armstrong said he had been sent emails confirming Kleenmaid was in debt to many whitegoods suppliers and the Australian Tax Office, but had not informed Westpac of the company's financial situation.
The Kleenmaid brand was sold in 2009 to Compass Capital Partners, and the company now operates out of Sydney.
The hearing continues.
- ARM NEWSDESK