AMA Group says interest has begun accruing on the balance of a loan it claims was made to former CEO and Executive Director Andrew Hopkins. In its FY2021 Annual Report, the company says Hopkins has an outstanding balance of around $1.4 million.
“As noted in the FY20 Annual Report, Andrew Hopkins had a related party loan which dated back to FY16 and was acquired as part of the Gemini Accident Repair Centres Pty Ltd acquisition,” AMA said. “It was previously agreed to be extinguished against future short-term and long‑term incentives, but under the agreement, it is immediately due and payable in the event that Andrew Hopkins is no longer employed or contracted. Andrew Hopkins’ loan accrues interest, and as at 30 June 2021, the balance outstanding on his loan is circa $1,400,000.”
AMA said it has not impaired the value of the loan largely due to the existence of a recently signed loan deed and an assessment of the capacity of Hopkins to repay the loan.
According to the Annual Report, legal proceedings in the Federal Court of Australia “remain on foot” and the group is seeking to recover funds of approximately $3 million relating to unauthorised expenses incurred by or on behalf of Hopkins as CEO of the company (approximately $1.6 million) and the repayment of the outstanding loan. At the date of the report, the group said it had not received any funds.
During the financial year, the group said it incurred $737,000 in professional fees related to investigating the whistleblower disclosures and subsequent legal proceedings stemming from a protected disclosure AMA received in late September 2020 from an individual employed by the company.
The FY2021 Annual Report claims that following the initial whistleblower disclosure and investigation, further whistleblower disclosures were made by a number of individuals who each raised allegations about Hopkins’ conduct. The conduct primarily related to unauthorised expenses.
“The unauthorised expenses are identified to have been incurred between FY16 and FY21, with the majority incurred prior to FY20,” the report said. “A portion of these unauthorised transactions were capitalised in property, plant and equipment due to the nature of the items. These have subsequently been written off to the profit or loss as impairment expense in FY21.”
AMA said that in May 2021, and as a result of McGrathNicol Advisory’s reports, the company filed proceedings in the Federal Court of Australia against Hopkins, and a company controlled by him, for the recovery of unauthorised expenses incurred by or on behalf of Hopkins as CEO of the company, and the repayment of an outstanding related party loan.
Hopkins has denied accusations of financial impropriety, saying earlier this year that he had done nothing wrong and the matter is a “complete stitch-up”. He is reported to have lodged a counterclaim against AMA in the Federal Court of Australia.