EXCLUSIVE: Former Dick Smith CEO Now Focused On Cheap As Chips Growth After Big Court Win

Nick Aboud the former CEO of Dick Smith has a new bounce in his step after a major victory in the NSW Supreme Court when a judge ruled that he did not engage in deceptive conduct with banks NAB and HSBC who have been ordered ordered to him over $1M in costs.

Talking to ChannelNews, Aboud is back doing what he does best, talking about retail with a lot of energy now going into expanding his value store and online operation Cheap As Chips.

“We are expanding” he said during a chat at a Mosman coffee shop where he looked relaxed after a harrowing six years since the $400M collapse of Dick Smith.

He said “We are opening new Cheap as Chip stores in rural locations as we believe there is a market for value products across rural Australia”.

He said that one of the new locations for a Cheap As Chips store will be Wagga Wagga.

While court proceedings are likely to drag on further with the banks tipped to appeal a judgement by Justice Michael Ball of the Supreme Court that awarded About over $1M in legal costs he is determined that there is growth and in the future a possible sale of the Cheap as Chips operation.

In the Dick Smith case, banks have also been ordered to pay an estimated $20.2m in costs relating to cross-claims brought against auditor Deloitte who were dragged into the Aboud case by upset shareholders and the banks that lost money in the collapse of the mass retailer.

Currently Kogan is trading as Dick Smith with an online site selling CE and appliance products.

The court found Mr Abboud did not engage in any misleading and deceptive conduct during debt facility negotiations.

The judge also ruled that HSBC did not suffer a disadvantage because its “detailed information and analysis” about Dick Smith’s financials did not come from Mr Abboud or Mr Michael Potts the former CFO.

Separate claims by company’s receivers Ferrier Hodgson that the directors breached their duties by declaring and paying the interim and final dividends for the financial year 2015 and that its policy of maximising O&A rebates led to buying of ‘bad stock’ was also dismissed.

Although Mr Abboud and Mr Potts did breach their duties through their rebate strategy, receivers could not prove the company suffered any loss as a consequence of that conduct.

Former Finance Director Michael Potts who has been ordered to pay back $43M was found to be the only director who breached duties in relation to the dividend payments, but the receivers could not establish this caused the company a direct loss.

Justice Ball expected defendants’ costs will increase with Mr Potts’ appeal to cost about $300,000.

HSBC and receivers Ferrier Hodgeson have also appealed, adding to defendants’ costs, widening the shortfall in the defendants’ directors’ and officers’ liability insurance, which was sitting at $52m on October 6 last year.