Director jailed for pocketing almost $100k in Indigenous Employment Program Rebates

Stuart Reid of Rodgers Reidy’s Darwin office was appointed voluntary administrator of Woodhill & Sons Pty Ltd, a remote construction business, in December 2018, with debts of approximately $1.7M.  A concrete batch plant, key to the Company’s completion of a Northern Territory Government remote housing building contract, was removed by the company’s sole Director.  Following our having reported the asset as stolen, Police found the Director using the batch plant for his own benefit, and he was charged with its theft. We recovered the asset.

Within 6 months prior to our appointment, the Director had diverted a profitable contract from Woodhill & Sons to a related company under his control, a contract never the less completed at Woodhill & Sons’ expense, and sought to retain $1M for his personal benefit. As Administrator, we brought legal proceedings against the Director and the related company and successfully recovered approximately $570,000 for the benefit of creditors from bank accounts under the control of the Director, obtained vesting orders for assets purchased by the Director from the funds, and a judgment against the Director for a significant sum.

A Deed of Company Arrangement was proposed by both the Director and his estranged spouse.  Creditors accepted the DOCA proposed by the spouse and we removed the Director from office and appointed his spouse as the new sole director to control the affairs of the Company. The Company is continuing to trade under the DOCA.

The Northern Territory Government had been carrying out an investigation into claims that had been made by the company against a now axed Government funded indigenous employment scheme. The Director was charged with making fraudulent claims in respect of a non-indigenous employee. At a Supreme Court trial, he was found guilty. He subsequently plead guilty to the theft of the batch plant.

This month, the Director was jailed for four and a half years for both convictions.

The DOCA to date has paid all secured creditor debts (approximately $600,000) in full, priority creditor claims in full, and 30 cents in the dollar for ordinary unsecured creditors. The unsecured creditors could potentially receive a dividends totalling 100 cents in the dollar under the DOCA.

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