Ariff spends night in police cell

THE banned liquidator, Stuart Ariff, was by turns tearful and combative in the Federal Magistrates Court yesterday after spending a night "staring at a light bulb" in a central Sydney police cell.

By InvestSMART · 2 Jul 2010

By InvestSMART ·
2 Jul 2010

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THE banned liquidator, Stuart Ariff, was by turns tearful and combative in the Federal Magistrates Court yesterday after spending a night "staring at a light bulb" in a central Sydney police cell.

Mr Ariff was arrested in St Leonards on Wednesday evening after failing to attend examinations by his bankruptcy trustee on Monday and Tuesday.

Two Australian Federal Police officers accompanied him to the court in Goulburn Street, half a kilometre from the police station in Surry Hills where he stayed the night.

The registrar, Paddy Hannigan, discharged the police but warned Mr Ariff that she did not want to issue another warrant if he absconded.

Mr Ariff is due back in court today to answer more questions as his trustee, Anthony Warner, tries to recover funds for creditors.

The largest group of creditors are yet to receive the $4.9 million Mr Ariff was ordered by the NSW Supreme Court to pay in compensation for misappropriating funds from companies of which he was the liquidator or administrator.

Yesterday, he broke down when he was asked to give his name and date of birth for the court record.

When he was handed documents relating to his financial affairs he said: "I'm not looking through any bundle of documents today what I've been through last night was amazing."

Later he said: "I've had two hours' sleep staring at a light bulb so I'm a bit blurry".

He also became tearful when he spoke about strains in his marriage and said he was unable to remember much of the events of 2008 and 2009 because of "what I have been through in the last couple of months, with my mother being very sick".

In contrast, he was forthright when answering questions about family trusts and companies involving his wife, Kathleen Clark, his parents, Yusof and Barbara Ariff, and his sister, Yazni Ariff.

Asked about claims on his bankrupt estate from relatives and their companies for hundreds of thousands of dollars, he said they were owed the money because they had paid his legal bills.

Mr Ariff was bankrupted in October, two months after Justice Patricia Bergin ordered him to pay the $4.9 million and banned him for life from the insolvency profession.

The judge said his "appalling" misconduct included using creditors' funds to pay for holidays and failing to pay employee superannuation.

Ms Clark and Yazni Ariff have been summonsed to appear at the examinations in August.

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Frequently Asked Questions about this Article…

Who is Stuart Ariff and why was he banned from the insolvency profession?

Stuart Ariff is a former liquidator who was banned for life from the insolvency profession by Justice Patricia Bergin. The NSW Supreme Court ordered him to pay $4.9 million in compensation after finding he misappropriated funds from companies he was liquidator or administrator of, including using creditors' money for personal expenses and failing to pay employee superannuation.

What did the article say happened when Ariff failed to attend trustee examinations?

The article reports that Ariff was arrested in St Leonards after failing to attend examinations by his bankruptcy trustee. He spent a night in a Surry Hills police cell and was later escorted by two Australian Federal Police officers to the Federal Magistrates Court, where the registrar warned him not to abscond.

What is the role of the bankruptcy trustee, Anthony Warner, in this case?

According to the article, Anthony Warner is the bankruptcy trustee who is conducting examinations and trying to recover funds for creditors. He is attempting to trace and recover the money ordered by the court as compensation for misappropriated funds.

What does the $4.9 million compensation order mean for creditors?

The article says the NSW Supreme Court ordered Ariff to pay $4.9 million in compensation for funds misappropriated from companies he managed. The largest group of creditors named in the case had not yet received that money at the time of the report, and the trustee is working to recover funds for them.

Can relatives and family companies make claims against Ariff’s bankrupt estate?

Yes — the article notes that relatives and their companies have lodged claims on Ariff’s bankrupt estate for hundreds of thousands of dollars. Ariff told the court they were owed money because they had paid his legal bills. Those claims are being examined by the trustee and the court.

Will Ariff and his family members face further court examinations?

Yes. The article states Ariff was due back in court to answer more questions as the trustee tries to recover funds. It also says his wife, Kathleen Clark, and his sister, Yazni Ariff, have been summonsed to appear at examinations in August.

What misconduct did the judge describe when banning Ariff?

The judge described Ariff’s conduct as “appalling,” highlighting that he misused creditors’ funds for personal items such as holidays and failed to pay employee superannuation. Those findings supported the lifetime ban and the compensation order.

Who else is involved in the investigation and proceedings mentioned in the article?

The article names several people and authorities: bankruptcy trustee Anthony Warner, Justice Patricia Bergin of the NSW Supreme Court (who issued the ban and compensation order), Federal Magistrates Court registrar Paddy Hannigan, and the Australian Federal Police who escorted Ariff to court. Family members mentioned include his wife Kathleen Clark, parents Yusof and Barbara Ariff, and his sister Yazni Ariff.