Unsecured BBY creditors may get nothing should companies be liquidated: Administrator
Unsecured creditors of BBY companies may lose out if the businesses are liquidated, with a $16 million shortfall in client monies, according to administrators from KPMG Australia.
The stockbroking firm entered voluntary administration last month, with the Australian Securities and Investments Commission (ASIC) suspending the Australian Financial Services Licences (AFSLs) held by BBY Ltd, BBY Advisory Services Pty Ltd and SmarTrader Limited, for three years, from 28 May 2015.
Initial findings from the administrators' report found there were indications of possible applications by BBY of client trust funds for unauthorised purposes since June 2014.
The administrators also found "inaccurate information may have been provided to BBY's lender to support additional funding requests", over the last 12 months.
In an updated report, released today, the administrators said, "there may be a shortfall in the BBY Limited client monies accounts in the order of $16 million against total trust account obligations of over $30 million".
The administrators also stated that their findings "led us to conclude that the BBY Companies may have been insolvent since June 2014".
The administrators concluded that "there were a number of factors that contributed to the failure of the business", highlighting "poor governance and an inadequate risk management framework, inadequate capital, trading losses and an inability of management to foreshadow and appropriately respond to a number of adverse events and margin calls".
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