Centronics' stock stolen, records destroyed

Centronics' stock stolen, records destroyed

In a bizarre repetition of the recent Z-Tek fiasco, stock has been stolen and records erased from another Melbourne-based distributor forced into liquidation.

Centronics, placed into administration on May 23, 2002, ceased trading while administrator Ferrier Hodgson looked at the options available to the business. On June 19, Ferrier Hodgson's Ross Blakeley and Peter Vince were appointed liquidators to sell off the company's assets.

But like the Z-Tek case, Blakeley and Vince soon discovered a perpetration of fraud taking place at some stage between the wholesaler going bust and their appointment as liquidators. They estimate that $575,000 worth of stock left the premises as the result of fake purchases involving post-dated, dishonoured cheques. In another repeat of what happened at Z-Tek, detailed financial records that Centronics held on a file server within an application called "Assist" were deleted.

These detailed records would have played a vital role in a thorough evaluation of the business by the administrators. Instead, they are left with just some gross sales and expenses information left over on a basic MYOB system.

According Blakeley, the alleged Centronics fraud has since caught the attention of the Victorian Police, the Australian Securities and Investment Commission (ASIC), and a private investigator appointed by Ferrier Hodgson.

Investigations from all three parties culminated in the Victorian Criminal Investigation Unit taking out a search warrant on a local retailer. A number of items were recovered from this retailer that had been purchased from Centronics, but investigators are not willing to name the retailer or confirm whether the goods had been bought legitimately or illegitimately (that is, before or after Centronics was forced out of business).

ARN's investigations reveal that a retailer called IT Supermarket in Melbourne was recently shut down for a period of one trading day while Victorian Police assessed its stock. A staff member at the retailer said the police "turned the place upside down" as they were suspicious the retailer had purchased goods from Centronics with cash at some stage after the administrator was appointed. However, the employee said IT Supermarket was only too happy to assist the police with their investigations. He said the company was satisfied with the police making a "minor apology" as they left the premises. "They were just doing their job," he said.

The similarities between the plight of Centronics and Z-Tek do not stop at stock being moved and records destroyed. Centronics, Z-Tek Computer Pty Ltd, IT Supermarket and parts of Z-Tek's new businesses, IT Warehouse and OTC Computer, all operate out of the suburb of Clayton. IT Supermarket staff said they had purchased "a lot of stock" from both Centronics and Z-Tek Computer Pty Ltd in the past.

Blakeley said he has found the law enforcement and watchdog authorities "very helpful" to date. He has also had the positive support of creditors. At stake is the recovery of approximately $3 million, which Centronics owed suppliers when it went into liquidation. Creditors include distribution heavyweights Tech Pacific, Ingram Micro and Dicker Data.

In the meantime, Blakeley is sorting out the usual issues of stock ownership for what is left of the Centronics business. Several suppliers have claimed "retention of title" for some of the remaining stock, while other equipment was sold at auction on June 25.

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