Fraud accused Andrew Young will cross examine former Kleenmaid director Gary Armstrong.
Fraud accused Andrew Young will cross examine former Kleenmaid director Gary Armstrong.

Kleenmaid ex-boss testifies against former business partner

A FORMER Kleenmaid director will be interrogated on the stand by his business partner who is on trial for fraud and insolvent trading charges.

Gary Armstrong was called as a prosecution witness against his former business partner Andrew Young who is on trial in the Brisbane District Court.

Mr Young, 64, has pleaded not guilty to 19 fraud and insolvency charges, relating to the collapsed whitegoods business Kleenmaid and its spare parts offshoot Edis Service Logistics.

Fraud accused drops legal team

Businessman accused of $13m fraud

Mr Armstrong told the court that Mr Young and another former director Bradley Young refused to give Westpac financial records when Edis was applying for a loan $13 million loan in 2007.

"I relayed the (bank's) request to both Bradley and Andrew and both of them said no," Mr Armstrong said.

"Bradley I guess would suggest that he said no because Andrew said no, but they both said no."

Mr Young is accused of dishonestly gaining a $13 million loan from Westpac and operating the company while the precarious financial state Kleenmaid was 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 owing nearly $100 million.

Mr Armstrong will need to be cross examined by his ex-business partner after Mr Young dropped his legal team halfway through the eight-week trial.

During evidence on Monday, Mr Armstrong described Mr Young as "the driving force" behind the Kleenmaid business but said he did not have much interest in the company's finances, despite getting regular cash flow updates.

"My point is that Andrew wasn't terribly interested in financial matters," Mr Armstrong said.

"And at one point Brad made the comment that Andrew didn't know what we were doing …"

" … Andrew was a born salesman and negotiator and his interest was in those areas."

Prosecutor Lincoln Crowley, acting on behalf of the Commonwealth DPP, is arguing that Mr Young failed in his duty to ensure the troubled company did not continue trading while insolvent.

The court heard the pair have known each other for more than 40 years after first meeting in the 1970s when Mr Young was a client of his father's tax compliance practice.

The trial continues under Judge Brian Devereaux. - NewsRegional