Family connections surface in college collapse
A NUMBER of family connections were revealed during the Federal Court public examination of SmartCity Vocational College's failed administration arm SC Admin Pty Ltd.
Evidence given during the examination, carried out by representatives of liquidators Worrells showed a number of payments made in the lead-up to the collapse of SC Admin in December, 2016.
A $2.2 million tax invoice dated December 31, 2015, from SC Admin to SmartCity Vocational College was explained by former SmartCity and SC Admin director James 'Jim' Spong as being for work on the college's 17 campuses around the country.
He said considerable money was spent on upgrading the campuses.
Evidence given during the public examination of SC Admin Pty Ltd by liquidators Worrells revealed at one point prior to the collapse of SC Admin, the administration arm of SmartCity Vocational College Pty Ltd, the company had paid $3.2 million in tax and $7.55 million to shareholders as a franked dividend which was recorded in September, 2015.
Jim's wife, Lynette, told the court she'd never been a director of Prime Slots Pty Ltd, but later confirmed it had been her original company when they moved from the UK in 2006.
Shortly before SC Admin entered administration Prime Slots was paid $175,388.46.
She told the court she'd not been in a very glamorous role at SmartCity Vocational College.
"I was in sales. I was very - not very glamorous. I was on the streets and I was talking and working with people who were like myself, who had disabilities. I was working on one on ones with those people," she said, having earlier explained she'd suffered dyslexia.
The court heard she'd invoiced SmartCity for her work under Prime Slots.
"And, so far as I was concerned, I was working for the students that wanted to come in and get a diploma course," she said.
She was told to invoice SC Admin Pty Ltd for her time, but couldn't remember who told her to bill SC Admin.
"I wasn't employed by the company, but I was on assignment. When the sales were really bad, they would ask me to go and do some training," Mrs Spong said, when asked if she'd been employed to rev up sales staff in September, 2016.
"I didn't know what the company was doing. I was not involved in the company. When I was asked to come in and do something, that's when I found out why I was asked to go and do some training," she said when asked if she was concerned, as a shareholder, about sales dropping in mid-2016.
She said she'd only invoiced $1500 a week, instead of $1500 a day had it been for another company.
The court heard tables, chairs and servers were sold by SC Admin to SmartCity prior to its collapse, but Jim Spong couldn't recall whether any valuation was obtained for the items.
"It was, unfortunately it was pennies on the dollar, but I don't recall any specific figure," he said.
The court also heard SC Admin had engaged former SmartCity CEO Glenn Spong's friend Clifford Whittaker's South African IT company for software development.
Mr Whittaker was also a shareholder of SC Admin.
The court heard about $443,000 had been spent on the software, which had been faulty.
Money was also lent to Career Pathways for software development, through Mr Whittaker's company, despite Career Pathways not trading at the time.
A number of payments were also raised during the examination, including a termination payment to Andrew Young on December 13, 2016, of $26,000.
Three executive staff were given bonuses of $27,000, $27,000 and $5700 respectively.
Jim Spong said he recalled there could have been a loan to Andrew Young which was repaid, but he couldn't recall the payment.
Mr Spong said Mr Young had no role in SC Admin or SmartCity Vocational College.