'Elaborate' Kleenmaid restructure a facade, prosecutor says
AN "ELABORATE” restructure carried out when Kleenmaid faced a cashflow crisis was a ruse, a prosecutor says.
Opening the Crown case at Andrew Eric Young's trial on Tuesday, barrister Stephen Keim told jurors to expect "complexity”.
Crucial elements of the 19 fraud and insolvency trading charges the Maroochydore man faced stemmed from a 2007 Kleenmaid restructure.
Young, 64, who is accused of dishonestly getting a $13 million loan from Westpac, pleaded not guilty to all charges on Monday.
He is representing himself in Brisbane District Court.
Mr Keim told jurors Young was "a key decision maker in all of the Kleenmaid companies at all times”.
The Crown accused Young of dishonestly incurring debts, including when he was allegedly a director of Edis Service Logistics.
Jurors will have to find Young was an Edis director at the relevant time for many charges to be proven.
Mr Keim presented an email former Kleenmaid director Bradley Young sent on April 27, 2007 to fellow former directors Andrew Young and Gary Armstrong.
The email proposed a meeting to discuss "cash flow” and an "Edis restructure update”.
The prosecutor said this showed Andrew Young knew the restructure was planned.
The "elaborate” restructure was a facade, the Crown claimed, designed so Edis could be sold for a "large sum” and create an illusion of separate firms when all Kleenmaid-related companies were effectively run as one.
Mr Keim also said Edis was making a "modest profit” but Kleenmaid had severe liquidity problems for years, with a balance sheet deficit of $7.2m at the end of March 2007.
"The key transaction was that Edis would acquire the most profitable part ... the shares in Edis were to be owned by a new company, Kleenmaid Corporate.”
Mr Keim said the Kleenmaid group went into voluntary administration April 9, 2009, and liquidation a "couple” of months later.
"The companies taken as a whole owed $96 million/ The defendant was a director of many of the Kleenmaid companies,” Mr Keim said.
Some insolvency trading charges related to an allegation Edis got credit from different suppliers, including CEO Global Logistics.
The trial is set down for 18 weeks.
Mr Keim told jurors it was likely more than 30 witnesses would be called.
On Monday, the names of more than 50 potential witnesses from across Australasia were read out.
The trial continues. -NewsRegional