Fashion millions unlikely to be recovered

Sydney Morning Herald

Wednesday August 26, 2009

Vanda Carson

THE discount women's fashion retailer Specialty Fashion Group has admitted that it will not be able to recover $12 million of the $17 million stolen by its former property manager.The company said its insurer had only paid $5 million to cover the loss and that this was probably all that would be recouped."The prospects of further material recoveries from this action appear unlikely," the company said in a statement to the Australian Securities Exchange.This is despite the company's success in obtaining court orders to force the senior fashion executive who stole the money, Simon Feldman, to repay it.Mr Feldman told the company, which is behind the women's clothing chain Katies, he had spent the money, using it to maintain his lifestyle and to "prop up" his three private businesses as well as giving $30,000 each year over five years to charities. The three private businesses are now in administration and liquidation, and Mr Feldman's Vaucluse home has been sold for about $3.6 million.Specialty's chairman, Geoff Levy, told shareholders yesterday that he and other members of the board were "completely disturbed" when Mr Feldman confessed to siphoning $16.7 million from the company.Mr Feldman said he had doctored invoices so they looked like they were for work done on shop fit-outs and renovations and siphoned the money to three of his private businesses that made children's play mats from recycled, granulated tyres, and stored documents for legal and planning firms.Mr Feldman said he stole from the company because he had a "grudge of a personal nature against something that happened" while he was there.He also told his employers he had been offered "millions in kickbacks" from store landlords over the years but decided to steal from the company instead.The companies behind the three private businesses that received the $17 million have been ordered by the NSW Supreme Court to repay the money.The companies were managed by Mr Feldman's business partner Richard Bamford.The bank accounts of one of these companies were controlled by Mr Bamford's wife, Patricia Yonon. That company, Muirhead Nominees, was ordered to repay the $9.3 million it received from Specialty.

© 2009 Sydney Morning Herald

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