No money, no answers for EDC creditors
Wednesday, 18th June, 2014
By Nick Gibbs
Backers of the defunct Enterprise Development Centre are no closer to an explanation after their debts were left unpaid following the organisation’s demise earlier this year.
Two sources established as local creditors have said that they received zero return from accounts owing and that they were still in the dark about why the government-funded centre went into liquidation.
One Broken Hill business owner said that during the first creditors meeting earlier this year, they were told about $210,000 worth of funding had been spent in just four or five months.
At the same meeting, it was mentioned that there was no money left to continue an investigation into the possibility of fraudulent behaviour, according to the same source.
To compound the business owners’ frustrations, they said a report from appointed administrator Worrells’ Solvency and Forensic Accountants said the EDC fell into insolvency in October 2013, despite accruing a further $12,000 debt after placing an order in late November.
It was not until they began chasing payment for the order in January of this year that they were asked by staff if they had received notice that the EDC was under administration.
According to the Australian Securities and Investments Commission (ASIC), there are serious penalties for allowing a company to trade while insolvent.
A second BH business owner who is owed just over $2000 for unpaid office equipment agreed that details surrounding the centre’s failure had been vague.
“There has been nothing concrete, just plenty of rumours,” they said.
“There was talk of fraud but nothing came of it.”
They also questioned the process undertaken by Pickles Valuation Services, believing the total asset worth estimated at between $7000 and $8000 was “a disgrace”.
“I believe it had a minimum value of around $30,000,” they said.
“The valuation process was very questionable.”
According to the creditor, a telephone system installed around eight months before the liquidation at a cost of about $4500 was valued at only $110 and seven Apple desktop 15-inch Macbook Pro computers were only worth $2100.
“We reckon they were worth around $9000,” they said, explaining they were told that second hand office equipment rarely attracted interest in Sydney.
The BDT spoke with Worrell’s administrator Aaron Lucan who said he would respond to claims about assets being undervalued in the coming days.
Mr Lucan was also asked to give an update of the report into the organisation’s collapse.
In February Worrell’s stated that creditors had unanimously voted to place the association into liquidation and a further detailed investigation would be undertaken into why the centre failed.
Pickles Valuation Services has also been contacted for comment.