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Sep 10, 2012

Court documents conflict with Liberal MP statement on company

Craig Kelly signed affidavits stating he was a director of his collapsed family furniture company -- despite telling federal parliament earlier this year there was "no substance whatsoever" to suggestions he was pulling the strings.

The federal Liberal member for Hughes, Craig Kelly, signed affidavits stating he was a director of his collapsed family furniture company as it fought legal action in New Zealand — despite telling parliament earlier this year there was “no substance whatsoever” to suggestions he was controlling the company behind the scenes.

New Zealand court documents, obtained by Crikey, reveal Kelly repeatedly signed statements as a “director of the respondent company” when representing DV Kelly over a fair trading spat surrounding its “Jet barstool” supplied to Harvey Norman outlets.

ASIC records list other family members as the firm’s directors and shareholders and brother Jason Kelly as the sole director of the related DVK International. However, DV Kelly administrator Cor Cordis stated earlier this year that Craig and Jason Kelly “may” have been de facto directors and therefore liable for the $4 million owed to creditors and staff.

Under the Corporations Act, “shadow” directors can be tapped for cash if a company is found to be trading while insolvent and can also face civil penalties. Under the constitution, undischarged bankrupts are not permitted to sit in the House of Representatives. If Kelly is successfully sued he may be forced to quit, triggering a Hughes byelection.

Crikey first reported the gathering storm clouds surrounding Kelly in early March. In May, Kelly was named by Leader of the House Anthony Albanese in a tit-for-tat manoeuvre after the opposition referred Craig Thomson to the privileges committee over his explanation to parliament surrounding the Health Services Union scandal.

Albanese alleged Kelly had failed to disclose the directorships of three entities related to DV Kelly — Homewares Depot Pty Ltd, Valentino Franchising Pty Ltd and Valentino Home Fashion Pty Ltd — that weren’t officially relinquished until March last year.

Later that day, Kelly told parliament there was “no substance whatsoever” to the shadow directorship allegation and stated he had “not, nor have ever been, a shareholder or a director of this company”. He said he had told his accountant to resign the other directorships upon his election in 2010, but there was a delay in updating the register due to illness. Under parliamentary rules, members have 28 days to declare any interests, including shareholdings and company directorships.

Last month, the privileges committee subsequently found there was “no grounds” to discipline Kelly over his failure to disclose the directorships or Thomson over his statement to parliament.

Former DV Kelly staff contacted by Crikey earlier this year said that Kelly, whose official title was “export manager”, was a regular fixture at the firm’s warehouse. He subsequently represented the company — despite his lack of training as a solicitor — in numerous legal disputes with competitors, landlords and contractors.

Five separate court documents appear to show Kelly’s signature next to the statement “director of the above-named plaintiff”. On one document Kelly’s contact is recorded as his official Parliament House email address.

In a judgement issued in December last year as DV Kelly prepared to shut its doors, New Zealand High Court Justice Edwin Wiley stated unequivocally that Kelly was “a director of the respondent company”.

In 2009, Judge Harvey of the Auckland District Court said: “The proceedings got started with a notice of proceeding filed by Mr Kelly, a director of the plaintiff company, who appears today and as director is able to appear.” The plaintiff company was DV Kelly.

Kelly’s office released a statement to Crikey today explaining that the family firm had “authorised him to represent them in this matter in New Zealand, and he did so according to their instructions”:

“This issue is no different to that already canvassed and dismissed by the Privileges Committee. It is on the public record that I acted for and on behalf of the Directors in a number of commercial disputes.

“The commercial dispute in the New Zealand District Court was initiated by the Directors of the Plaintiff in 2008. I was subsequently requested and authorised by the Directors to act for and on their behalf in New Zealand on that matter, and I agreed to do so.

“The ASIC records, which have always been publically available, clearly show that at no time was I a Director or shareholder of the Plaintiff.

“My register of interests was and always has been correct.”

It is not known if creditors — led by St George bank, which is owed $2 million — will pursue the firm through the courts for compensation. Staff owed over $300,000 are considering their options through the government’s General Employee Entitlements and Redundancy Scheme.

DV Kelly liquidators Cor Cordis did not return calls this morning.

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4 comments

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4 thoughts on “Court documents conflict with Liberal MP statement on company

  1. Andrew Crook

    To clarify in par 3, the sole shareholder reference was to DVK Int as it relates to DV Kelly.

  2. Jimmy

    Can’t wait for Suzanne Blakes take on this, surely she will be as outraged as she was to Thomson.

    But really while intersting and could lead to some “political” issues for the libs there are more important stories.

  3. Peter Ormonde

    He’s innocent I tell you… obviously innocent! The whole thing is a vicious smear – a conspiracy of St George Bank, his unpaid staff, the New Zealand Courts and Anthony Albanese pulling the strings.

    We need men like this in parliament – men who are willing to risk their all in the turbulent seas of business, lose the lot and send their creditors scurrying off to the courts. Men of character and courage. Oh yes, and vision.

    Actually I disagree completely with the parliamentary ban on bankrupts. I reckon that running a business into the ground and leaving everyone out of pocket is an excellent grounding in current conservative political theory and practice. The whole business is bankrupt from start to finish. We need folks who know how to look after themselves.

  4. Jimmy

    Peter – Have you seen Albo’s ;atest detective work? It’s regarding Abbott’s claim’s he read the BHP statement at 3.45pm before going on 7.30 and saying he hadn’t, Hockey backed his story saying they read it together, the issue is Hockey is in the chamber speaking at 3.45.

    Again on sideshow but funny.