Australian designer Jessie White has been busy distancing herself from any personal involvement in the finances of her bankrupt clothing line Shakuhachi, since last week’s airing of A Current Affair segment on the comfortable life she’s been living in Bali as the label circles the drain.
The nightly news program showed White living the good life in Bali as the company she founded and formerly directed drowns in debt—more than $1 million of it.
White has since given a statement to Fairfax Media playing up her new role as designer and creative adviser and washing her hands of any personal responsibility for Shakuhachi’s horrendous financial state.
At present, my only involvement with Shakuhachi is consulting and advising on design. Since Shakuhachi was acquired by Loft HK Limited, I have not been involved in the day to day running of the business or any of the retail sites in either Australia or Indonesia. The online store is run exclusively by Loft HK Limited and I have no involvement with orders, purchasing or the fulfillment of any goods. I am not receiving any funds from the sale of Shakuhachi clothing either in-store or online. My understanding is that Loft HK Limited are working closely with all consumers and Fair Trading to resolve any complaints, provide a refund and/or fulfil (sic) all outstanding orders.
But before the A Current Affair feature on White, the Sydney Morning Herald’s Lucy Cormack was already delving into the Shakuhacihi situation. In a report from March 2017, she talked to Andrew Spring, the liquidator charged with the former Shakuhachi Limited, which was placed under voluntary liquidation in May 2015 following mounting claims of late and unfulfilled orders.
More than 80 of the company’s creditors in Australia, including manufacturers and modeling agencies, had not been paid, according to Spring’s report. The amount left unpaid was nearly $1 million and moreover, it appeared to many that White had left to Bali rather than facing investigation for continuing operations (ie taking customer orders and money) after the company had become insolvent.
An insolvent trading claim against White would be at least $476,397, estimates Spring.
So while White says she’s only now acting in the capacity as a “designer and creative adviser” and was not prompted to leave Australia because of the liquidation but rather because she lived in Bali periodically all her life, major red flags have been raised.
The funny thing is, nowhere in her statement did White mention the $634,034 that the liquidator’s report has calculated she personally owes, based on his analysis of the company books and records.
White’s solicitor has previously disputed the debt, according to Spring’s report, but failed to provide him with a statement of her personal assets.
Something clearly doesn’t add up.
A tangled web of companies
To make things even more complicated, though Shakuhachi Limited under White was put into liquidation, assets like the brand and online store were purchased by Loft HK Limited in 2015.
Loft HK Limited says it is working closely with the relevant regional Australian consumer protection agency, NSW Fair Trading and that Shakuhachi Limited’s actual debt is “closer to half” the amount cited in Spring’s report.
Moreover, the existence of another troubled firm, Emporium Clothing Pty Ltd, only makes things more confusing. White is the director of that company as well and it uses Shakuhachi’s existing online infrastructure, according to a follow-up report by Cormack released on Sunday.
This apparently puts two liquidations under White’s belt, as Emporium began the process as of April 26.
Emporium has an outstanding debt of approximately $315,310 owed to 35 different creditors, says liquidator Steven Naidenov.
Naidenov continues to investigate “potential breaches” made by White and says he will report any findings to the Australian Securities and Investments Commission.
White has shot down allegations that neither Emporium nor Shakahuchi “engaged in any type of phoenix activity.”
It was a sharp downturn in sales that put Emporium into liquidation, claims White.
