10-172AD ASIC disqualifies 13 directors of failed companies from managing corporations
Thursday 12 August 2010
Between April and June 2010, the ASIC disqualified 13 directors from managing corporations following their involvement in failed companies.
Of these disqualified directors, four were from New South Wales and three were from Victoria. Three directors from Western Australia, two from Queensland and one from the ACT were also disqualified.
ASIC’s latest actions bring the total number of disqualified directors to 70 individuals for the financial year ending 30 June 2010, for a total period of 225 years. This represents a significant increase in the number of disqualifications on the previous year and follows a sharp increase in insolvency activity during the global financial crisis.
‘ASIC is committed to targeting directors who have a history of being involved in failed companies. Disqualification removes their right to be involved in the management of a company and takes away the protection of limited liability. Disqualification action assists to protect future creditors, investors and employees who may otherwise become involved with these individuals’, said ASIC Commissioner, Dr Peter Boxall.
Seven of the 13 most recent disqualifications resulted from the receipt of supplementary reports after further investigations were conducted by liquidators who had received funding through the Assetless Administration Fund (AA Fund). This fund was established to assist liquidators to undertake more detailed investigations into the circumstances of a company failure and to report, where appropriate, director misconduct to ASIC.
Details regarding the banned directors are provided below.
Disqualified individuals have the right to lodge an application with the Administrative Appeals Tribunal for a review of ASIC’s decision.
ASIC’s register of banned and disqualified individuals can be found at www.asic.gov.au.
Section 206F of the Corporations Act allows ASIC to disqualify a person from managing corporations for up to five years if, within a seven year period, the person was an officer of two or more companies, and those companies were wound up and a liquidator provides a report to ASIC that the company is unable to repay its debts.
Mr Alan John KING – banned for two years
Mr Alan John King, of Balgowlah Heights, New South Wales, was banned on 6 April 2010.
Mr King was the director of two failed companies, A.C.N. 002 211 663 Pty Ltd (formerly A.S.K. Solutions Pty Limited) and A.C.N. 081 072 111 Pty Ltd.
Both companies entered liquidation on 26 November 2008 and a report was lodged by the respective liquidators stating that no dividends were expected to be paid to unsecured creditors. The companies owed over $4 million to the Australian Taxation Office (ATO) and $512,348 to their employees.
Mr Stuart James PEAT – banned for three years
On 10 March 2010, ASIC disqualified Mr Stuart James Peat, of Echuca, Victoria, from managing corporations for three years.
Mr Peat’s disqualification followed an ASIC investigation into his role in two failed companies, Riverside Management Pty Ltd and Fanman (Echuca) Pty Ltd. The companies were placed into liquidation between 1 March 2007 and 28 November 2008. ASIC received a report from the liquidator regarding Riverside Management Pty Ltd on 17 September 2009.
ASIC found that Mr Peat’s management and involvement in the affairs of Riverside Management Pty Ltd and Fanman (Echuca) Pty Ltd did not meet the standards required of an individual in his position. Furthermore, ASIC’s investigation found that Mr Peat permitted Riverside Management Pty Ltd and Fanman (Echuca) Pty Ltd to incur debts despite the companies being insolvent.
ASIC also found that Mr Peat failed to adequately understand and perform the duties of a director.
Michael Bartholomew LIMERICK – banned for four years
Mr Michael Limerick of Kenmore, Queensland, was banned from managing corporations on 7 April 2010.
Mr Limerick was the director of four failed companies, 5 Lines Pty Ltd, Limerick Family Pty Ltd, Applied Building Technology Pty Ltd and ABT Fabrication Pty Ltd. In each case, the companies failed to pay taxation liabilities.
ASIC was satisfied that Mr Limerick engaged in “phoenix” activity in that he transferred the business of one indebted company to another company with a similar name, leaving the initial company with no assets to pay creditors while continuing what was essentially the same business using the new company.
It was also found that Mr Limerick failed to understand, and perform adequately, his duties as a director.
Mr Stephen Philip HILL – banned for three years
Mr Stephen Philip Hill, of Bateau Bay, New South Wales, was banned on 21 April 2010.
Mr Hill was the director of two failed companies: A.C.N. 002 211 663 Pty Ltd (formerly A.S.K. Solutions Pty Limited) and A.C.N. 081 072 111 Pty Ltd.
Both companies entered liquidation on 26 November 2008 and a report was lodged by the respective liquidators stating that no dividends were expected to be paid to unsecured creditors. The companies owed over $4 million to the ATO and $512,348 to their employees.
Mr Marijan SUJSTER – banned for two and a half years
On 24 April 2010, ASIC disqualified businessman, Mr Marijan Sujster, of Greensborough, Victoria, from managing corporations for two years and six months.
Mr Sujster’s disqualification follows an ASIC investigation into his role in two failed companies, Future Technix (Aust) Pty Ltd and Future Technix Pty Ltd.
ASIC’s investigation found that Mr Sujster failed to ensure that Future Technix (Aust) Pty Ltd kept proper financial records and that he permitted the company to trade while it was insolvent.
ASIC also found that Mr Sujster failed to disclose to the liquidator a bank account and motor vehicle that belonged to Future Technix (Aust) Pty Ltd.
Ms Alison NEWHAM – banned for four years
Ms Alison Newham, of Mona Vale New South Wales, was banned on 15 April 2010.
Ms Newham was banned following her involvement in four failed companies, All Protection Tinting Pty Ltd, Newham Nominees Pty Ltd, All Protection Tinting Corporation Pty Ltd and Gocube Pty Ltd. The companies were involved in supplying and installing building film and were wound up with significant deficiencies owed to creditors and the ATO. This deficiency collectively totalled $1,658,288.
ASIC found that Ms Newham failed to keep proper books and records, to adequately explain the companies’ transactions, and assist liquidators. It was further found that Ms Newham failed to ensure that Gocube Pty Ltd didn’t trade while insolvent.
ASIC was satisfied that Ms Newham engaged in “phoenix” activity in relation to the four companies by transferring the business of one indebted company to another company with a similar name leaving the initial company with no assets to pay creditors while continuing what was essentially the same business using the new company.
Mr Blagojce DJONESKI – banned for three years
Mr Blagojce Djoneski, of Yokine, Western Australia, was banned on 19 May 2010.
Mr Djoneski was the director of four failed companies, Goldfinger Facilities Corporation Pty Limited, Goldfinger Cleaning Corporation Pty Limited, Smart Care Cleaning Services Pty Limited and Clean Connection Pty Limited.
ASIC decided that Mr Djoneski failed to take reasonable steps to ensure that Goldfinger Cleaning Corporation Pty Limited complied with its obligations to keep written financial records. ASIC also found that Mr Djoneski breached his duties as a director by failing to properly exercise his powers and duties with care and diligence regarding loans arranged between two of the companies and himself and failed to pay statutory liabilities.
Mr Richard CURTIN – banned for five years
Mr Richard Curtin, of Macgregor ACT, was banned on 3 May 2010.
Mr Curtin's disqualification followed an investigation into his role as director of seven failed companies, Fresh Ideas Group Pty Ltd, Richard Curtin Pty Limited, Dash Australia Pty Ltd, Love Salad Pty Limited, AFG Leasing Pty Limited, NRGIZE Australia Pty Ltd, and NRGIZE Leasing Pty Ltd. These companies failed with substantial outstanding liabilities including statutory liabilities.
ASIC found that Mr Curtin consistently failed to ensure the companies’ books and records were adequately maintained and failed to perform, or perform adequately, the duties of a director.
ASIC determined that it was not in the public interest to allow a director of multiple failed companies that are unable to pay any, or any substantial part of the debts owed to unsecured creditors, to continue being involved in the management of companies.
Mr Robert James DOON - banned for two years
Mr Robert James Doon, of Goulburn, New South Wales, was disqualified from managing corporations on 20 April 2010.
Mr Doon was banned following his involvement in four failed companies, Montmas Nominees Pty Ltd, Dominion Australia Pty Ltd, Link Freight Management Pty Ltd, and Link Administration Pty Ltd.
ASIC found that Mr Doon may have traded Montmas Nominees Pty Ltd while the company was insolvent, failed to submit a Report as to Affairs to the liquidator within 14 days of the making of a winding up order, and failed to deliver all company books to the liquidator as soon as practicable after the winding up order was made.
Mr David Valentine PARNIS – banned for two and a half years
Mr David Parnis, of Palmyra, Western Australia, was banned on 5 April 2010.
Mr Parnis' disqualification followed an ASIC investigation into his role as a director of Accelerate IT Solutions Pty Ltd, Accelerate Australia Pty Ltd, Digital Signatures Australia Pty Ltd and DVP Australia Pty Ltd, where a liquidator was appointed.
All four companies failed with outstanding liabilities including liabilities to the ATO.
Mr Parnis was previously disqualified from managing corporations for five years from 2001 to 2006.
ASIC’s investigations found that Mr Parnis failed to take reasonable steps to secure compliance by the companies with their obligations to keep adequate books and records and that he allowed Accelerate IT Solutions Pty Ltd to continue to incur debts despite the company being insolvent.
ASIC also found that Mr Parnis failed to perform adequately his duties as director by failing to ensure that another company, Accelerate Australia Internet Pty Ltd, complied with its statutory obligation to pay the annual review fee.
Ms Susan PEPPER – banned for four years
On the 13 March 2010, Ms Pepper of Brookwater, Queensland, was banned from managing corporations for four years.
Ms Pepper was the director of Cyrene Property Services Group Pty Ltd, Cyrene Group Pty Ltd, Cyrene Properties (Goonellabah) Pty Ltd and Grangewell Pty Ltd.
The companies were involved in consultancy and property development. Each company was
wound-up with significant deficiencies owed to creditors. This deficiency collectively totalled $2,368,899.
ASIC expressed concern that Ms Pepper failed to exercise due care and diligence in the performance of her duties and failed to assist the liquidator. Ms Pepper also failed to lodge documents in compliance with her statutory duties.
ASIC was satisfied that Ms Pepper did not demonstrate that she exercised the requisite attentiveness and responsible conduct while she was a director of these companies.
Mr Brendan Truesdale – banned for two years
On 11 May 2010, ASIC disqualified businessman, Mr Brendan Truesdale, of Olinda, Victoria, from managing corporations for two years.
Mr Truesdale’s disqualification follows an ASIC investigation into his role in three failed companies, Future Technix (Aust) Pty Ltd, Future Technix Pty Ltd and Truesdale Nominees Pty Ltd. The companies failed with collective deficiencies in excess of $800,000.
ASIC’s investigation found that Mr Truesdale failed to ensure the companies kept proper financial records and met their statutory liabilities.
Mr Christopher Gerald SAVAGE – banned for five years
On 25 June 2010, Mr Savage of Claremont, Western Australia, was banned from managing corporations for five years.
Mr Savage was the director of five failed companies, Chris Savage (WA) Pty Limited, Architectural Plaster (Aust) Pty Limited, Architectural Plaster (WA) Pty Limited, Architectural Plaster (NSW) Pty Limited, and Chris Savage (NSW) Pty Limited.
The companies were placed into liquidation between 21 July 2006 and 15 May 2009. In each case, ASIC received a report from the company’s liquidator indicating that no dividend would be payable to unsecured creditors. The companies owed the ATO over $630,000.
ASIC noted that Mr Savage was declared bankrupt on 9 November 2009 and had not been discharged from his bankruptcy.
Editorial note 1: This advisory was amended on 22 December 2010.
Editorial note 2: On 11 October 2010, Mr Savage sought review in the Administrative Appeals Tribunal (AAT) of ASIC's decision to disqualify him. On 22 December 2010, and with the consent of ASIC and Mr Savage, the AAT reduced the period of Mr Savage's disqualification from five to four years.