Between January 2010 and March 2010, ASIC disqualified six directors from managing corporations following their involvement in failed companies.
Of these disqualified directors, three were from Victoria, two were from Queensland and one was from Western Australia.
The disqualifications are a result of ASIC’s ongoing commitment to removing directors from managing companies after they have failed to fulfil their responsibilities relating to the proper running of the company, or after the company had been placed in external administration.
The actions taken by ASIC serve to protect future creditors, investors and employees who may otherwise be involved with a director who has a history of being involved in failed companies.
Three of the 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).
The AA Fund was established to assist liquidators to carry out more detailed investigations into the circumstances of a company failure and to report, where appropriate, director misconduct to ASIC.
Details of the directors banned by ASIC between Jaunary 2010 and March 2010 are provided in the attachment to this advisory.
All the directors who were banned were afforded the opportunity to lodge an application with the Administrative Appeals Tribunal for a review of ASIC’s decision.
ASIC’s register of banned and disqualified persons can be found at www.asic.gov.au.
Background
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 Keith BARNES – banned for five years
Mr Keith Barnes, of Kew Victoria, was banned on 16 February 2010.
Mr Barnes’ disqualification followed an ASIC investigation into his role as a director of the failed companies, K & R Services (Aust) Pty Ltd and K & R Services (Vic) Pty Ltd. Both companies were involved in the equipment hire industry and failed with substantial outstanding liabilities including statutory liabilities to the Australian Taxation Office (ATO) and Victorian WorkCover Authority.
Mr Barnes was previously disqualified from managing corporations for a period of four years from 1992 to 1996.
ASIC’s investigation found that Mr Barnes allowed the companies to continue to incur debts despite the companies being insolvent and Mr Barnes failed to ensure that the companies’ books and records were adequately maintained.
ASIC was satisfied that the failure of the companies and a third company, K & R Services Pty Ltd, demonstrated that Mr Barnes had persistently failed in the management of corporations. Furthermore, ASIC was concerned that Mr Barnes regularly transferred assets from an indebted company to a newly formed company while continuing essentially the same business.
Mr Saviour Lawrence CAUCHI – banned for four-and-a-half years
Mr Cauchi, of Airport West, Victoria, was banned on 25 March 2010.
Mr Cauchi was banned following his involvement in two failed companies, Cauchi Cleaning Property Maintenance & Consulting Pty Ltd and Cauchi Cleaning Services (Aust) Pty Ltd.
ASIC decided that Mr Cauchi failed to act with care and diligence, or in good faith and for a proper purpose, or improperly used his position as director in relation to the transfer of the business of Cauchi Cleaning Services (Aust) Pty Ltd to Cauchi Cleaning Property Maintenance & Consulting Pty Ltd. The business was subsequently transferred to another related entity.
ASIC also decided that Mr Cauchi may have traded Cauchi Cleaning Property Maintenance & Consulting Pty Ltd whilst the company was insolvent, withdrew funds from the company for his own benefit or the benefit of family members, and overestimated the value of his properties which affected repayment of loan monies.
Mr Stephen George HALLETT – banned for two years
Mr Stephen George Hallett, of Boronia, Victoria, was banned on 16 March 2010.
Mr Hallett’s disqualification follows an ASIC investigation into his role as director of Willowbank Park Pty Ltd and Colonial Holdings (Australia) Pty Ltd, which were wound up in 2007.
Both companies failed owing significant amounts to creditors and the ATO. ASIC’s investigations confirmed that the companies failed due to a number of reasons, including poor financial control and poor strategic management. ASIC found that Mr Hallett had acted as ‘a front’ for another person who was unqualified to manage the companies. ASIC also found that Mr Hallett signed blank cheques, failed to ensure that income tax returns were lodged, failed to ensure that proper financial records were kept, and abrogated his responsibilities as a director.
Mr Mark Travis GOLDENBERG – banned for five years
ASIC has disqualified Mr Mark Travis Goldenberg, of West Leederville, Western Australia, from managing corporations on 23 March 2010. Please see ASIC Advisory 10-67 ASIC bans WA director for five years for further information.
Mr Jozsef HEGYVARI – banned for two years
Mr Hegyvari of Varsity Lakes, Queensland, was banned from managing corporations on 5 February 2010
Mr Hegyvari was the director of two corporations that have been wound up, Lifestyle Audio Visual & Automation Pty Ltd and Schaffer Investments Pty Ltd. A third failed company, ACN 007 794 952 (formerly HiFi Acoustics), was also taken into consideration by ASIC.
Each company was wound-up with significant deficiencies owing to creditors; collectively the deficiency totalled $1,758,198.
ASIC decided that Mr Hegyvari, as the director of these companies, failed to exercise due care and diligence in the performance of his duties and that two of his companies traded whilst insolvent. In addition, Mr Hegyvari failed to lodge documents in compliance with statutory duties.
ASIC was satisfied that Mr Hegyvari did not demonstrate that he exercised the requisite attentiveness and responsible conduct as a director and or officer of these companies.
Mr Ferdinand John LOTTER – banned for two years
Mr Lotter of Banyo, Queensland, was banned from managing corporations on 29 March 2010.
Mr Lotter’s disqualification followed an ASIC investigation into his role as the director of two corporations that have been wound up, GDR Systems Pty Ltd and ACN 082 942 354 (GDR). ASIC decided mismanagement and poor financial control, including lack of records, contributed to the company’s failure.
The companies were wound up with significant deficiencies owing to creditors; collectively the deficiency totalled $2,477,091.
ASIC decided that Mr Lotter failed to keep proper books and records to adequately explain the companies’ transactions. It was further decided that Mr Lotter failed to ensure that GDR did not trade whilst insolvent.
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