Former TEAC Australia CFO guilty of financial dishonesty

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Former TEAC Australia CFO guilty of financial dishonesty

Kenneth David Evans, the former chief financial officer and director of TEAC Australia Pty Ltd, has been sentenced to two years and six months imprisonment, wholly suspended for three years, in the County Court of Victoria following an investigation by ASIC.

Evans pleaded guilty on 23 August 2007 to five contraventions of the Corporations Act, including two counts of failing to act in good faith in the best interests of TEAC Australia, one count of dishonestly using his position as a director of TEAC Australia, one count of falsifying company books and one count of providing false or misleading information to the auditor of TEAC Australia.

The Court was told that Evans dishonestly failed to exercise his powers as a director in TEAC Australia’s best interests by failing to register securitisation documents and enforce TEAC Australia’s rights in relation to a loan provided to a private company of TEAC Australia’s chief executive officer and principal, Gavin Muir (deceased). He also dishonestly used his position as a director of TEAC Australia to reduce the amount outstanding on the loan on the eve of the appointment of administrators to TEAC Australia and gave false or misleading information to the auditors over the value of TEAC Australia’s debtors.

In July 2003, Muir’s private company, Bay Street Corporation PTY LTD (in liquidation) borrowed $6 million from TEAC to help settle the purchase of a site in Port Melbourne previously owned by TEAC. Acting on Mr Muir’s instructions, Mr Evans failed to lodge the appropriate securitisation documents for the loan.

In the days preceding the appointment of the administrators in March 2005, Mr Evans gave instructions to the company bookkeeper to make false entries in the books of TEAC Australia to reduce the outstanding balance of this loan. Mr Evans also provided false information to the auditor on the true extent of the TEAC Australia debtor’s book.

According to the Australian Securities and Investment Commissions, Evans attributed responsibility for his actions to Muir claiming that he was merely a senior employee carrying out the instructions of the company’s principal.
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