Former Kleenmaid director back on stand in fraud trial
A COURT has heard that as a collapsing whitegoods empire continued to incur more debt, it was in the context of the global financial crisis.
Former Kleenmaid director Andrew Young, 64, raised the impact of the financial climate on his collapsed company as he cross-examined former business partner Gary Armstrong on the stand during the eighth week of a lengthy trial.
Mr Young is defending himself against a raft of fraud and insolvent trading charges in Brisbane District Court, after dropping his legal team a month ago.
The Sunshine Coast businessman has been accused of dishonestly gaining a $13 million loan from Westpac when the bleak future of the company was already known.
He is also accused of asking staff members to withdraw $330,000 on his behalf from company accounts just days before administrators took over in 2009 with the company owing nearly $100 million.
During cross examination on Tuesday, Mr Young suggested that in 2008, the global financial crisis had meant tighter trading conditions and a reduction in sales for Kleenmaid.
"So it's correct, is it not Gary, that by September '08 the full effect of the downturn in business that we ... call the global financial crisis had well and truly commenced?" Mr Young asked.
"It was certainly in that vicinity," Mr Armstrong replied.
Mr Armstrong also agreed with Mr Young's suggestion that in November 2008, Kleenmaid's spare parts offshoot, Edis Service Logistics, was incurring millions of dollars of debt while, at the same time, continuing to repay significant sums of debt to suppliers.
Throughout the trial, the defence has argued that Mr Young believed the company's financial woes were "only a temporary issue".
The trial continues under Judge Brian Devereaux. - NewsRegional