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​Securities commission shines spotlight on Dick Smith collapse as directors face questioning

​Securities commission shines spotlight on Dick Smith collapse as directors face questioning

Individuals linked to the failed business set to face questioning.

Dick Smith directors are set to face questioning from receiver Ferrier Hodgson regarding the collapse of the retain chain, following allegations of foul play in the lead up to its demise.

Triggered by “serious issues” with regards to the running of the failed business, Ferrier Hodgson plans to quiz company individuals after being granted permission from the Australian Securities and Investments Commission.

While the receiver remains tight-lipped on who will face questioning during the investigation, Sydney Morning Herald sources claim “it would be surprising if the examination did not include the directors."

“There's no way someone would fund an examination and not question those individuals," reported SMH.

During the investigation, Ferrier Hodgson plans to not only examine company books and protocols, but also assess offshore accounts and potential tax evasion through overseas distribution agreements.

As reported by ChannelNews, “questions are also being asked as to the price Dick Smith paid for house brand goods and whether they overpaid for goods via a process that would enable money to be shifted out of Australia to tax haven accounts in Hong Kong.”

While not implicated specifically in the investigation, following the collapse of Dick Smith earlier this year, CEO Nick Abboud tendered his resignation, leaving the embattled company after three years in charge.

Following Abboud’s departure, CFO Michael Potts also jumped shipped, leaving at the time receivers analysing the books of estimated an underpayment of $2 million, impacting 3,200 current and former employees dating back to 2010 in Australia.

Despite its standing as one of the best known brands associated with consumer electronics in Australia and New Zealand, Dick Smith closed its doors for the last time on May 3, burdened by over $400 million in debts.

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