Ella Rouge Beauty founder pleads guilty to misappropriating $2.6 million

Ella Rouge founder Ali Hammoud

Ali Hammoud, the founder of Ella Rouge Beauty Pty Ltd, which operates the NSW chain of ‘Ella Rouge Beauty’ salons, has pleaded guilty to one count of dishonestly misusing his position as a director of ERB International Pty Ltd (ERB) and one count of making a false statement to obtain a financial advantage.

In a statement issued today, the corporate regulator alleged that between 9 August 2007 and 4 March 2008, Mr Hammoud used his position as a director of ERB dishonestly with the intention of gaining a financial advantage for himself, namely by misappropriating $2,609,831.91 from the company for his own use.

ASIC also alleged that between 8 August 2003 and 26 June 2007, Mr Hammoud, with the intent to gain a financial advantage, recklessly made false statements in workers compensation insurance forms by understating the estimated and actual wages of the company. It is estimated that ERB obtained a financial advantage of approximately $338,709.25 as a result of the false statements.

Mr Hammoud was committed to the Sydney District Court where the matter will be mentioned on 5 December 2014.

Ali Hammoud and his wife Manel Isa were the winners of the 2009 Ethnic Business Award for Initiative. In a statement provided to SiN, lawyers for the Ethnic Business Awards and its founder Joseph Assaf said EBA award winners are "required to submit detailed financial reports with supporting references. These references are carefully reviewed prior to nominees being placed on a shortlist for judging.

"...at the time of the awards in 2009 EBA was not aware of any investigations underway and no information was provided to the EBA suggested any impropriety on the part of Ali and Manel.

"Joseph Assaf and the EBA regret that now, in 2014, investigations are being undertaken in relation to the Hammouds, although it is our understanding that no findings have been made against them personally at this time," the statement said. It should be noted that ASIC's statement makes no allegation of wrongdoing against Ms Isa.

A breach of directors' duties carries a penalty of five years imprisonment and/or a fine of $220,000. Making a false statement to obtain a financial advantage carries a penalty of five years imprisonment and/or a fine of $22,000.

Mr Hammoud was committed to the Sydney District Court where the matter will be mentioned on 5 December 2014.

See also: EXCLUSIVE: Liquidator's fall exposes Ella Rouge founders to phoenix allegations

See ASIC announcement: 14-315MR

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