ASIC has barred SC, a former director in the food services industry from Albury, NSW, from managing corporations for 18 months due to his involvement in the failure of 4 companies.
Between September 2015 and October 2021, SC was a director of 4 companies: Fresh Food Wholesale Pty Ltd (ACN 633 256 112), Fresh Start Equity Pty Ltd (ACN 621 953 384), Oh! That’s Good! Food Group Pty Ltd (ACN 608 407 085), and Life Pack Pty Ltd (ACN 164 364 667). Fresh Food Wholesale Pty Ltd engaged in wholesale trade, supplying pre-packed meals to major retail outlets. Fresh Start Equity Pty Ltd specialized in cooking and selling pre-made ready-to-eat meals to retailers. In July 2019, Fresh Food Wholesale Pty Ltd acquired the business of Fresh Start Equity Pty Ltd.
ASIC determined that SC acted improperly and failed to fulfil his obligations as a director when he:
- Neglected to ensure compliance with tax obligations for both Fresh Food Wholesale Pty Ltd and Fresh Start Equity Pty Ltd;
- Abused his position to facilitate the acquisition of the failing business of Fresh Start Equity Pty Ltd by Fresh Food Wholesale Pty Ltd, resulting in harm to the latter;
- Misused his position at Fresh Start Equity Pty Ltd to transfer $297,406.50 in repayments to Fresh Food Wholesale Pty Ltd, causing harm to the former;
- Allowed Fresh Start Equity Pty Ltd to trade while insolvent.
At the time of ASIC’s decision, the 4 companies collectively owed $9,575,616 to unsecured creditors, including $529,831 to the ATO.
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.