Former The Good Guys CEO Up To His Neck In Dodgy Problems
Their South African parent Company is corrupt, their parent Company in Australia Greenlit Brands flogged Harris Scarf with $70 Million in the till only for the Company to be declared bankrupt days later by Allegro Funds minus the $70M, now the Company who is trying to flog Fantastic Furniture who were hammered today by the Australian Competition & Consumer Commission for misleading conduct at another asset Freedom Furniture.
CEO of Greenlit Brands is former The Good Guys CEO Michael Ford who is currently chatting to investment bankers, while he was at TGG, Ford looked at floating the business which was eventually acquired by JB Hi Fi who promptly told Ford his services were not required.
Greenlit Brands the company that owns Freedom Furniture, Plush and Fantastic Furniture posted $288.5m loss for the year ended September 29, according to financials lodged with the Australian Securities and Investments Commission.
As for Greenlit brands parent Company which is linked to South African retailer Steinhoff International investigators are still working out the extent of a massive fraud on the Company by executives who at one stage had a major say in the Australian operation.
A recent independent report found the Greenlit Brands had overstated profits over several years in a $7.4 billion accounting fraud involving a small group of top executives and outsiders.
Earlier today the ACCC said that Steinhoff Asia Pacific Pty Ltd (Steinhoff), trading as Freedom Furniture, had paid penalties totalling $25,200 after the ACCC issued it with two infringement notices for alleged false or misleading representations to customers about their consumer guarantee rights.
Basically, the Company was trying to get out of any potential warranty claims when they told consumers on their website “Furniture items cannot be returned or exchanged, except at Freedom’s absolute discretion.”
The ACCC claims The Greenlit Brands linked Company of which Ford is the CEO contravened the Australian Consumer Law (ACL) by making this alleged false or misleading representation.
Ford who ran The Good Guys for several years would have known the regulation and laws in Australia relating to warranty claims and exchanges.
While the Fantastic’s brand is well known among the general public and small cap investors questions have to be raised as to whether one would trust any deal done by Greenlite Brands following the Harris Scarfe sale that cost suppliers tens of millions of dollars and their links to a questionable parent Company in South Africa.
At this stage it’s not known how much Greenlight Brands gor for the Harris Scarfe business or whether they got any part of the $70M that was in the till when the business was later sold and pushed into liquidation before being sold to the Spotlight Group.
Steinhoff International acquired theFantastic Furniture business for about $350 million in 2009.
According to the AFR, analysts reckon Fantastic Furniture could be worth $400 million to $600 million, based on market share data and estimated sales and margins.
Since acquiring the Company, Fantastic has been wrapped up in Steinhoff, which has undergone radical restructuring locally due in part to losses in Australia and the corruption scandal engulfing the South African parent Company.
Steinhoff Asia Pacific was separated from its parent, Steinhoff International, and rebadged Greenlit Brands in an effort to avoid the stench of corruption.
Today Greenlit is the combination of Steinhoff Asia Pacific and Fantastic Furniture and includes furniture retailers Fantastic, Plush and Freedom and bed sellers Snooze and Original Mattress Factory.
ChannelNews is not saying that Ford or Current Greenlit management have done anything illegal.