ASIC disqualified AB, from managing corporations for a period of three and a half years due to her involvement in the following three companies: Rococo Hawthorn No 1 Pty Ltd; Cleveland Lodge Developments Pty Ltd; and Bellbird Estate Holdings Pty Ltd. The companies entered liquidation between 4 October 2017 and 9 February 2018 and were all involved in the property development industry in Victoria.
ASIC’s investigation found that AB acted improperly and that she failed to meet her obligations as a director in various ways, including:
- executing finance agreements on behalf of Cleveland Lodge Developments for the benefit of another corporation of which she was the sole director and shareholder;
- making payments from Cleveland Lodge Developments’ bank account to corporations of which she was also the sole director and shareholder for goods and services not provided to Cleveland Lodge Developments; and
- failing to ensure compliance with financial records and statutory lodgment obligations.
At the time of ASIC’s decision, the three companies collectively owed a total of $8.6m to unsecured creditors, with $7.9m owed to the ATO.
In making the decision to disqualify AB, ASIC relied on reports it commissioned from the companies’ liquidators and which were paid for through the Assetless Administration Fund, as well as other materials. This action was taken under Section 206F of the Corporations Act, which allows ASIC to disqualify individuals from managing corporations for up to five years if they were officers of two or more companies that were wound up within a seven-year period and a liquidator provided reports to ASIC regarding the companies’ inability to pay their debts. Read the full ASIC media release here.