ASIC Cancels 4 More

ASIC is now reporting some director banning’s in batches.  An example of 4 directors no longer able to act as director took place between 1 January to 31 March 2024.

Claiming that some of these 4 were involved in running up numerous debts including the ATO, employees, other small businesses; that they also participated in illegal phoenix activity, and that they diverted company funds to related parties without legitimate commercial purposes. A brief summary of the 4 appears below.

RW

RW, a director in the textiles industry from Penrith, NSW, has been barred from managing corporations for a year as a consequence of his inadequate management, which resulted in the collapse of three small proprietary companies.  These companies collectively owed $1,487,009.18 to unsecured creditors, including the ATO.  ASIC’s disqualification of RW extends until 5 February 2025.

SD

SD, a director in engineering and mining services from Brisbane, QLD, has been barred from managing corporations for a period of two years following his implication in the collapse of four small proprietary companies.  These companies collectively owed $4,885,034 to over 50 unsecured creditors, including the ATO, with outstanding amounts of $52,043 for unpaid wages and employee leave entitlements, and $23,173 owed to Fair Entitlements Guarantee (FEG) for payments made to former employees.  ASIC’s disqualification of SD remains in effect until 11 February 2026.

AH

ASIC had previously released a statement concerning the disqualification of AH, a former director in the hospitality, construction, cleaning, and electrical industries sectors.  This disqualification extends for a maximum period of five years, a consequence of his involvement in the failure of seven small proprietary companies.  These companies collectively owed $3,723,402.16 to unsecured creditors, including $547,346 to Revenue NSW and $23,246 to former employees, which includes unpaid superannuation.  AH’s disqualification by ASIC remains in effect until 14 February 2029.

DS

DS, a director in the construction industry from South Coogee, NSW, faced disqualification from managing corporations for four years.  This sanction was a result of his participation in the failure of eight small proprietary companies, which collectively owed $33,357,590.28 to unsecured creditors.  Notably, this debt included $13,768,044.14 owed to the ATO, $1,315,512.69 to the Workers Compensation Nominal Insurer, and $1,794,824.30 to the Office of State Revenue.

ASIC’s disqualification of DS remains in force until 26 February 2028.

The Law 

Under Section 206F of the Corporations Act, ASIC is authorized to disqualify an individual from managing corporations for a maximum of five years if, within a seven-year timeframe, that person served as an officer in two or more companies that were wound up with a liquidator’s report attesting to their inability to meet debts.

When determining whether to prohibit a director from managing corporations, ASIC depends on data supplied by registered liquidators in their preliminary statutory reports and additional reports, as well as on convictions resulting from ASIC’s Request Assistance for External Administration (RAEA) program. This program allows registered liquidators to seek assistance from ASIC in cases where directors, officers, or individuals associated with a company in external administration fail to fulfil their legal obligations to aid liquidators.

Seek reliable professional guidance

Directors of companies should seek reliable professional guidance if they are unsure about their legal obligations or have concerns regarding the company’s ability to sustain trading and meet its financial obligations. 

Read the full ASIC media release here.