Final chapter in Kleenmaid saga (ASIC’s final clean up)

Kleenmaid, a business founded by Andrew Young in 1980, was an Australian-owned domestic appliance importer and retailer, operating a chain of company and franchised stores across Australia. Its first product was an American-manufactured washing machine sold through appliance service agents.

In 2008, rumours started to circulate about the financial stability of the company. Administrators were appointed on 9 April 2009.

The consolidated debts of the Kleenmaid group totalled approximately $96 million, which included $26 million in customer deposits on undelivered appliances.

The company slid into liquidation, and in December 2009 a private equity firm acquired the Kleenmaid subsidiary whose assets included the intellectual property of Kleenmaid’s trademark, logo and brand name. Kleenmaid (the name), successfully re-vamped, extended and relaunched, continues today.

The Administrators’ 17 May 2009 report indicated that the company may have been trading while insolvent since June 2007.

After the company had gone into liquidation, ASIC commenced an investigation into its failure. In February 2012, the three former directors (Gary Armstrong, Bradley Young and Andrew Young) appeared in court for the first time.

However, the first disciplinary action concluded was against the Kleenmaid group’s former auditor, Wayne Wessels, who was suspended for three years on 29 November 2013 by the Companies Auditors and Liquidators Disciplinary Board.

In August 2015, Gary Armstrong was sentenced to five and a half years’ imprisonment for one count of fraud and two counts of insolvent trading.

In August 2016, Bradley Young was sentenced to nine years’ imprisonment for one count of fraud and 17 counts of criminal insolvent trading. Bradley has appealed his conviction and sentence. Judgment has been reserved for a decision.

The trial and conviction of the third director Andrew Young was more convoluted and lengthy.

Although Mr Young was included in the trial with his brother Bradley in 2016, on 26 April 2016 the trial was discontinued against him. The trial against Mr Young commenced again on 28 August 2017, but on 20 October 2017 the jury was discharged because of Mr Young’s health.

In 2019, the trial against Mr Young started again. Following a 59-day trial, on 10 January 2020, at the age of 66 years Mr Young was found guilty of two counts of fraud and 17 counts of criminal insolvent trading. On 7 February 2020, Mr Young was sentenced to nine years of imprisonment.

During trial deliberations, the self-represented Mr Young said “I’ve had enough of this court”, while after the sentencing ASIC’s Commissioner John Price said “Mr Young’s lengthy imprisonment reflects the seriousness of this matter and should serve as a strong warning to company directors of the consequences where misconduct is established.”