A motorcycle company owned by a two-time Young Entrepreneur of the Year and former Young Australian of the Year has collapsed owing more than $1 million.
On 7 August, the Supreme Court of New South Wales ordered Braaap Motorcycles Pty Ltd to be wound up, owing 121 unsecured creditors at least $1.074 billion.
Former motocross champion Brad Smith started the business at age 17 in 2008 after being disappointed by the quality of minibikes imported from China.
He decided to travel to China the following year, where he found two factories prepared to manufacture bicycles to his specifications for sale in Australia.
The company, based in Carrum Downs in Melbourne’s south-east, sells and rents 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 warranty.
Queensland man Liam Leonard is seeking a refund for a $5,000 bicycle he bought for his wife after it suffered “several” mechanical problems in just 18 months.
“The chain was too tight on the bike and had no flexibility. A chain snap or break at high speed can have fatal consequences. They refused to send a new chain under warranty to refit it 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 minibikes imported from China.
On 7 August, the New South Wales Supreme Court ordered Braaap Motorcycles Pty Ltd, which owed 121 unsecured creditors at least $1.074 billion, to be wound up (Mr Smith pictured).
Queensland man Liam Leonard (left) is seeking a refund on a $5000 bike he bought for his wife (right) after it suffered “several” mechanical problems in just 18 months.
‘After replacing the chain, the front sprocket seal broke (as a result of the original chain being too tight) and it started leaking oil.’
Mr. Leonard said the lifetime warranty he paid an extra $250 for covered the $3 stamp on the broken sprocket, but not the cost of labor.
He also says the speedometer has a faulty speed reading and the motorcycle’s front ABS brake sensor has failed.
“We purchased through Braaap because we wanted a test bike for my wife. And with a lifetime warranty for an extra $250, how could we go wrong?” he said.
“We are continuing to study the possible courses of action to take. We will look into the possibility of claiming the full price of the motorcycle from the liquidators, as well as the cost of the lifetime guarantee.”
Just weeks before the company collapsed, Mr Smith spoke about what it means to be an Australian entrepreneur.
‘“In Australia, when we talk about entrepreneurs, we actually mean founders. Everyone should be an entrepreneur, whether you’re the founder or the tenth employee,” the founder told Artisana Academy in April.
‘More often than not, if you look at the second, third or fourth employee, if they’re good, if they’re very talented, they’re going to have good employee stock 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 age 14 with money he had saved from motocross competitions and went full-time three years later.
The teenager started selling motorcycles out of his garage and during 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.
“I understood the risk and loved the pressure. They would never have let me do it if they thought I was just looking for opportunities,” he wrote.
“They trusted me. They trusted my character and my intelligence. What a great gift for a father to give his son, the gift of confidence and self-belief.”
However, it has not always been a bed of roses.
In 2016, New South Wales Police arrested Mr Smith and charged him with a range of fraud offences for his alleged involvement in a “revival” syndicate that scraped and replaced serial numbers to resell motorcycles.
He was found guilty of one count of dishonestly obtaining financial advantage by deception and given a two-year community correction order.
Mr Smith (pictured) spoke about what it means to be an Australian entrepreneur in an interview shared just weeks before his company collapsed.
In 2019, Braap Wholesale pleaded guilty to six counts of approving the fitting of identification plates and three counts of importing vehicles requiring modification and was ultimately fined $25,000.
Braap Wholesale went into liquidation in 2020 and Braaap Motorcycles Pty Ltd followed suit four years later.
One of the company’s bank accounts had only $69.27 and the others were overdrawn.
Liquidators Edwin Narayan and Graeme Ward of Mackay Goodwin have warned customers not to expect any refunds. news.com.au information.
“Unfortunately, our office will not be able to fulfil orders taken by the company prior to our appointment and we will also be unable to provide a refund,” Mr Narayan and Mr Ward wrote.
‘If you have paid your 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.
