Investment company collapses with $100 million in debt

A confectionary company at the centre of a landmark intellectual property fight with Mars Australia has been placed in voluntary administration following the collapse of its parent company Reseau International Trading, which is believed to owe about $100 million to investors and creditors.

The Sweet Rewards, RIT and another company called Salt Pan Trading were placed in administration late last week at the request of RIT director Richard Smith.

The companies are now in the hands of administrator Michael Basedow, principal at the Adelaide office of accounting firm Pitcher Partners.

While RIT’s primary operations involved the import and export of products including confectionary, the company also appears to have operated as an investment vehicle, where investors were promised annualised returns of over 100% per annum.

Reports in the Adelaide Advertiser suggest up to 300 creditors and investors might be caught up in the collapse.

Basedow also told the newspaper he is looking to speak with former musician Kevin Peek, who was previously a guitarist with instrumental group Sky during the 1980s.

While Peek was not a shareholder of director of RIT, the business is registered at his address and Basedow said he understands Peek holds some of RIT’s business records.

Peek has been declared bankrupt twice and was sentenced to jail for three years in 1994 after being found guilty of fraud.

A spokesperson for Pitcher Partners told SmartCompany this morning that RIT was the parent company of Sweet Rewards but was unable to comment further.

Sweet Rewards hit the headlines in June 2009 after confectionary giant Mars launched legal action against the company, claiming Sweet Rewards had infringed the registered trade mark of Maltesers (which is owned by Mars) with a Sweet Rewards product called Malt Balls.

However, the Court dismissed Mars’ claim, saying that the Maltesers packaging was so well recognised that there was no chance consumers could confuse it with the Malt Balls packaging.

“In that sense, Mars is a victim of its own success,” Justice Nye Perram said in his judgement.