Hearing stumps ex-RFG execs
The former chief executive and senior executive of beleaguered Retail Food Group have been unable to answer a series of questions on notice put to them during a bizarre parliamentary hearing last month.
Tony Alford and Alicia Atkinson — once intimately involved in running RFG, which owns franchises including Brumbies, Gloria Jeans and Donut King — responded to questions through their lawyer Peter Kumnick, of Gold Coast-based solicitors K2 Law, but were unable to provide basic information about employment agreements or even the number of companies where directorships were held.
At the parliamentary hearing, Mr Alford insisted on starting each answer with the word “privilege”, which he claimed was in line with his legal advice, although this was said to be superfluous by members of the parliamentary joint committee of corporations and financial services.
In a document lodged with the committee earlier this week, Mr Kumnick said the answers to questions on notice were provided on the basis that Mr Alford and Ms Atkinson “claim privilege as to their answers”.
While Mr Alford was asked to take on notice how many companies he was a director of, Mr Kumnick said the answer could not be provided.
“We have on Mr Alford’s instructions attempted to carry out electronic searches of records maintained by ASIC for Mr Alford. These searches could not be undertaken because the ASIC online search tool returned the error ‘Too many records found to continue extract’,” Mr Kumnick said.
Mr Alford was also unable to specify the profitability from payments from franchisees to the franchisor. When asked what properties Mr Alford and Ms Atkinson jointly owned through associated entities, Mr Kumnick said to “the best of our clients’ knowledge there are no real properties which are held jointly by Mr Alford and Ms Atkinson in their personal capacities”.
Mr Alford was unable to produce documents showing details of his salary sacrifice plan.
“He does not possess and cannot produce a copy of his employment agreement with RFG,” Mr Kumnick said.
When asked to explain related party arrangements with a car racing scheme, Mr Kumnick said Mr Alford “cannot answer that question from his personal knowledge”.
The former executives were forced to appear before the parliamentary hearing last month after failing to stall their appearance in the High Court.
For five years, RFG allegedly hid from its shareholders an arrangement in which it outsourced the management of 20 to 30 franchisees to a Gold Coast investment vehicle, Exit 57, whose sole director was Ms Atkinson.
RFG issued an almost halfbillion dollar asset writedown as a result of “significant” store closures and franchise troubles in financial 2018, the first year Mr Alford ceased to be an office holder of RFG. The company has been accused by more than 700 franchisees of running those businesses into the ground with unfair franchise deals.