Brad Smith was named Young Australian of the Year twice before he was convicted of fraud. Now he owes more than $1million after another spectacular fall from grace
- Braaap Motorcycles Pty Ltd collapsed on August 7
- Series of creditors now owed more than $1million
- READ MORE: Why thousands of Australian businesses are going bust
A motorcycle company belonging to a two-time Young Entrepreneur of the Year and former Young Australian of the Year has collapsed owing more than $1million.
Braaap Motorcycles Pty Ltd was ordered into liquidation by the NSW Supreme Court on August 7, owing 121 unsecured creditors at least $1.074million.
Former motocross champion Brad Smith started the business at the age of 17 in 2008 after being disappointed by the quality of imported mini bikes from China.
He decided to travel to China the following year where he found two factories prepared to make bikes to his specifications to sell in Australia.
The company, which has a headquarters in Carrum Downs in southeast Melbourne, sells and leases new and used bikes across the country.
Braaap offers a paid lifetime warranty with the purchase of every bike, and customers are now asking how they can claim that guarantee.
Queensland man Liam Leonard is seeking a refund on a $5,000 bike he purchased for his wife after it suffered 'several' mechanical issues in just 18 months.
'Chain was fitted to the bike way too tight. No flex. A break/snap in the chain at speed can have fatal consequences. They declined to have a new chain sent under warranty to re-fit correctly,' he told Daily Mail Australia.
Former motocross champion Brad Smith (pictured) started the business at the age of 17 in 2008 after being disappointed by the quality of imported mini bikes from China
Braaap Motorcycles Pty Ltd was ordered into liquidation by the NSW Supreme Court on August 7 owing 121 unsecured creditors at least $1.074million (Mr Smith is pictured)
Queensland man Liam Leonard (left) is seeking a refund on a $5,000 bike he purchased for his wife (right) after it suffered 'several' mechanical issues in just 18 months
'After the chain was replaced, the front sprocket seal broke (as a result of the original chain being too tight) and started leaking oil.'
Mr Leonard said the lifelong warranty he had paid an extra $250 for had covered the $3 seal for the broken sprocket but not for cost of the labour.
Additionally, he says the speedometer has a faulty speed reading and the front ABS brake sensor on the bike has failed.
'We purchased through Braaap as we wanted a learner motorcycle for my wife. And with lifetime warranty for an extra $250, how could we go wrong,' he said.
'We are still looking into avenues of possible action to take. We will be looking at claiming the full price of the motorcycle as well as the lifetime warranty cost to the liquidators.'
Just weeks before the collapse of the company, Mr Smith spoke about what it means to be an Australian entrepreneur.
'What we call entrepreneurs in Australia, we often actually mean founders. Everyone should be an entrepreneur whether you're the founder or the 10th employee,' the founder told Artisana Academy in April.
'Most of the time, if you go and look at the number two, three, four employee, if you're good, if you're highly talented, you're going to have good employee share option bonuses.'
In his book, 'DIRB IT UP: Do It Real Big', Mr Smith (pictured) revealed that his parents had mortgaged their house to help fund his business venture
Mr Smith began trading stocks at the age of 14 with money he had saved from motocross competitions and went full-time three years later.
The teenager began selling motorbikes out of his garage, and within the first year, while most of his friends were still in school, he sold $230,000 worth of stock.
In his book, 'DIRB IT UP: Do It Real Big', he revealed that his parents had mortgaged their house to help fund his business venture.
'I understood the risk and I loved the pressure. They would never have let me do it if they thought I was just plucking trades,' he wrote.
'They trusted me. They trusted in my character and brain. What a great gift for a parent to give their child, the gift of self-belief and trust.'
However, it hasn't always been smooth sailing.
In 2016, Mr Smith was arrested by NSW Police and charged with a series of fraud offences over his alleged involvement in a 'rebirthing' syndicate that scratched off and replaced serial numbers to resell motorbikes.
He was convicted of one charge of dishonestly obtaining financial advantage by deception and was handed a two-year community corrections order.
Mr Smith (pictured) spoke about what it means to be an Australian entrepreneur in an interview shared just weeks before the collapse of his company
In 2019, Braap Wholesale pleaded guilty to six counts of approval for the placement of identification plates and three counts of importation of vehicles requiring modification and was ultimately handed a $25,000 fine.
Braap Wholesale went into liquidation in 2020 with Braaap Motorcycles Pty Ltd following suit four years later.
One of the company's bank accounts had just $69.27 and others were overdrawn.
Liquidators Edwin Narayan and Graeme Ward from Mackay Goodwin has warned customers not to expect any refunds, news.com.au reports.
'Unfortunately, our office will not be in a position to fulfil orders taken by the company prior to our appointment and will also not be able to provide you with a refund,' Mr Narayan and Mr Ward wrote.
'If you have paid the deposit with a credit card, you may be able to contact your credit card provider and discuss alternative options.'
Daily Mail Australia has contacted Mr Smith for comment.
