Chairman Profited From Charity: Court

Illawarra Mercury

Thursday March 20, 2008

By VERONICA APAP

A KIDZWISH Foundation chairman was selling the Illawarra children's charity toys at a profit through his own company, the NSW Supreme Court heard yesterday.

Stephen O'Brien owned Angel Wholesalers and sold toys to the foundation - albeit at half the profit he would have made from other clients - while he was the chairman of the KidzWish board.

That relationship could have put Mr O'Brien in conflict with the foundation's constitution which disqualified board members who profited from the charity, the court heard.

Mr O'Brien, along with Wayne Larkin and Barry Sandry, are defendants in a NSW Supreme Court battle to determine who consitutes the legitimate board of the KidzWish Foundation.

Charity founder and secretary Christine Beaven took action against the three men in an effort to prevent them claiming to be board members.

Both board factions claim the other has either been expelled or resigned from the charity last year.

The charity was established to host an annual Christmas party for 2500 disadvantaged children.

Mr O'Brien said his company was owed $42,000 by the foundation for unpaid bills.

The court heard that although Angel Wholesalers' invoices said the company was a division of Uncle Pete's Toys Wollongong - a store owned by Mr O'Brien's brother - Angel Wholesalers was not related to Uncle Pete's.

Mr O'Brien said he had never held his company out as being involved in Uncle Pete's Toys.

"It was a cross-marketing ploy for people to know the toys were available in his shop," he said.

Angel Wholesalers' Australian Business Number (ABN) was not included on the invoices read out to the court.

"At the time of printing those invoices my ABN was not available," he said.

During cross-examination by the plaintiff's lawyer Jim Johnson, Mr O'Brien said he had encouraged other board members to resign from the board during a meeting in August last year.

Mr O'Brien said at the time he believed the charity was trading while insolvent as it could not repay his company's debt and he threatened to take legal action to recover the money.

He told other board members they could be held personally liable for money outstanding if the matter was successful and that they should resign to avoid this.

Mr Johnson accused Mr O'Brien of trying to stage a coup with Mr Sandry and Mr Larkin to control the board once other members had resigned in fear of litigation that he never instigated.

Mr O'Brien denied that was the case.

Earlier in the day, Mrs Beaven said last September she had been reimbursed $7000 from the charity for legal expenses relating to the case.

She said at the time she had engaged lawyers to act on behalf of the charity to expel the three defendants.

Mrs Beaven said she later found she could not act on behalf of the charity and she would have to pay for any further legal action personally, which she did.

The case continues.

© 2008 Illawarra Mercury

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