S Central exec found guilty of cooking the books

A former financial controller at collapsed IT services company S Central has pleaded guilty to falsifying the books of the group.

S Central went in and out of liquidation in the year up to April 2010 before it completed the process on 23 December 2010. Its staff and goodwill were sold to integrator Brennan IT for an undisclosed amount after an acquisition by ComputerCorp fell through.

Many of its employees said they were never fully paid out their entitlements. A group of frustrated staff set up a website to follow the movements of S Central managing director Peter Mavridis following the sale. 

The Australian Investment and Securities Commission last week revealed that David Cologna, a former financial controller at the company, had last Monday pleaded guilty in the Melbourne County Court to five charges – brought about by ASIC – of falsifying the company’s books.

An ASIC investigation had revealed Cologna had submitted duplicated and/or falsely inflated invoices to National Australia Bank under a debtor factoring agreement, the regulator said in a statement.

"This led to credit totalling approximately $4.8 million being advanced to companies within the S Central Group. Debtor factoring involves the assigning of debts that are owed in exchanged for credit advanced by a finance provider."

Cologna was sentenced to 12 months' jail in a two-year suspended sentence. ASIC did not find evidence of Cologna receiving direct personal financial gain from his activities.

Brennan IT's Dave Stevens told CRN that he had been unaware of the case but it did not have a material impact on the company’s acquisition of S Central’s assets, as it did not purchase any of the integrator’s debt or liabilities.

S Central founder Peter Mavridis did not respond to request for comment by the time of publication.