Former Teac Australia CFO and director, Kenneth Evans, has been sentenced to two-and-a-half years imprisonment by the County Court of Victoria.
The sentencing followed an investigation by the Australian Securities and Investments Commission (ASIC) into the company's business practices.
Evans blamed former managing director, Gavin Muir, claiming he was merely a senior employee carrying out the instructions of the company's principal. Muir, who passed away in May last year, was charged with 11 counts under the Corporation Act including seven of failing to act in the best interests of the company and two of dishonestly using his position as managing director.
In August last year , Evans pleaded guilty to five contraventions of the Corporations Act.
The Victorian Court was told Evans had dishonestly failed to exercise his power as a director in Teac Australia's best interest by failing to register securitisation documents and enforce Teac Australia's rights in relation to a loan provided to Muir's private company - Bay St Corporation; dishonestly using his position as a director to reduce the amount outstanding on the loan with the appointment of administrators and giving false or misleading information to the auditors over the value of Teac Australia's debtors.
In July 2003, Muir's private company, Bay St Corporation, borrowed $6 million from Teac to help settle the purchase of a site in Port Melbourne, which was previously owned by Teac.
In March 2005, Evans gave instructions to the company bookkeeper to make false entries in the books of Teac Australia to reduce the outstanding balance of this loan.
Evans also provided false information to the auditor on the true extent of the Teac Australia debtors' book.
In 2007, Teac Australia was sold to Singaporean interests, which currently trade under the Teac brand. Bay St Corporation is in administration following the appointment of liquidators in April 2006.
Deloitte Touche Tohmatsu was appointed in the interest of Teac's local unsecured creditors, who were owed about $80 million.