CLOSED: SmartCity's eventual deregistration left staff and students with many questions.
CLOSED: SmartCity's eventual deregistration left staff and students with many questions. Matthew McInerney

SmartCity directors to face Federal Court examination

DIRECTORS and executive staff of a Maroochydore-based national training college's admin company that left hundreds jobless after its collapse just before Christmas will face a public examination in the Federal Court.

On Monday lawyers acting for liquidators Worrells Solvency and Forensic Accountants will question SC Admin Pty Ltd director Jim Spong and others, understood to include his son and SmartCity Vocational College CEO Glenn Spong, about the collapse of the administration company.

SC Admin was placed into voluntary liquidation in December, 2016, after being paid about $80 million in two years through the Federal Government's VET-Fee Help student loan funding scheme.

The public examination has been set down to run from Monday to Friday next week in the Federal Court in Brisbane.

Worrells liquidator Paul Nogueira said it was a "general examination" which would seek to uncover reasons for the company's failure, what happened with the money and a general examination of any asset disposals.

 

QUESTIONS: The SmartCity office at Maroochydore's First Ave.
QUESTIONS: The SmartCity office at Maroochydore's First Ave. Sunshine Coast Daily

Former staff had previously told the Daily about fire sales of office equipment at various SmartCity college campuses around the country in the lead-up to SC Admin's collapse.

Liquidators would be solely focused on the civil element of the matters and any criminal matters that may arise would have to be pursued by the Australian Securities and Investments Commission.

It's understood part of next week's examination will focus on whether another company, SC Operations (Aust) Pty Ltd, registered by Jim Spong about six weeks prior to SC Admin's collapse, had been acting on behalf of the SC Operations (Aust) Trust, which paid staff transferred from SC Admin to SC Operations a few days after SC Admin's collapse.

It's understood ASIC can take action if a trustee was set up as a company.

 

DIRECTOR: SmartCity Vocational College and SC Admin director Jim Spong.
DIRECTOR: SmartCity Vocational College and SC Admin director Jim Spong. Facebook

Staff transferred to SC Operations were this week still battling to retrieve some of their entitlements, including annual leave, redundancy pay and more.

ASIC had advised them it wasn't in a position to wind up the SC Operations trust which had paid them, meaning they were unable to lodge claims with the Federal Government for their unpaid entitlements.

SC Admin was wound up on December 16, 2016, with just $223 in the bank, and owed up to $2.6 million in annual leave and entitlements to staff as well as almost $2 million to the Australian Taxation Office.

 

SmartCity Vocational College CEO Glenn Spong.
SmartCity Vocational College CEO Glenn Spong. Contributed

About 18 months prior to SC Admin's collapse a SmartCity Vocational College financial report showed almost $7.5 million had been paid out to shareholders, mostly companies owned or directed by Spong family members or associates, while more than $1.4 million was distributed to trusts in the 2014-15 financial year.

A number of former staff questioned whether former college CEO Glenn Spong would appear at the examination next week, after his wife sold their Alexandra Headland home earlier this year amid rumours they were preparing to move overseas.

But the Daily understood both Glenn and Jim Spong were cooperating and Glenn would make himself available in some form to liquidators running the examination.



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