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Three real estate franchises in north-western Sydney have gone under with debts of A$5 million ($5.8 million), it was reported today.
The three Raine and Horne businesses in Castle Hill, Dural and Cherrybrook/West Pennant Hills have closed amid allegations of fraud and mismanagement, News Limited reports.
Administrators have been called in to sort out the mess which has forced franchise owners Jason and Jacqui Potten to sell their A$3 million home.
The NSW Department of Fair Trading has been called in to review the findings of a current investigation into the troubled franchises.
Administrator Quentin Olde said the Pottens, directors of Propestate Pty Ltd, applied for voluntary administration when they could no longer pay staff wages, rent owed to landlords and loans.
"The cause of the failure of these three offices is largely as a result of the principal illegally moving proceeds out of the trust account," Mr Olde told News Limited.
About A$4 million was owed to two finance companies that advanced commissions to the directors for sales that were allegedly never made, Mr Olde said.
About A$1 million was allegedly owed to landlords in the Hills area and about A$100,000 was owed to 20 staff members in wages, superannuation, annual leave and entitlements.
- AAP
