The Australian Securities and Investments Commission (ASIC) has disqualified a further six directors from managing corporations following their involvement in failed companies.

The disqualifications are part of ASIC’s ongoing efforts to address phoenix activity and remove directors from the corporate environment who fail to fulfil their responsibilities to creditors, employees and companies in general.

In the 2007–08 financial year, ASIC disqualified 52 directors from managing corporations for periods totalling 175 years.

‘ASIC’s ability to tackle misconduct arising from company failures was enhanced by the introduction of the Assetless Administration Fund in February 2006. This scheme allows ASIC to fund preliminary investigations by liquidators into the failure of companies with few or no assets,’ said ASIC’s Acting Executive Director of Consumer Protection, Ms Delia Rickard.

‘The Assetless Administration Fund has allowed liquidators to prepare reports for ASIC which identify misconduct on the part of company officers which in turn enable us to take action to disqualify directors who fail to act in the best interests of companies, creditors and employees,’ said Ms Rickard.

In June, the following people were disqualified:

ASIC disqualified Mr Brian Kendall Williams, of Newtown, Queensland, from managing corporations for the maximum period of five years.

Mr Williams’ disqualification followed an ASIC investigation into his role in two failed companies, Spectre Trading Pty Ltd and Premium Strategies Pty Ltd.

ASIC’s investigation found that Mr Williams lent his name as a director of the companies and facilitated the operations of Spectre Trading Pty Ltd by opening a bank account for the company and signing blank cheques. Mr Williams did not appear to have had any active involvement in the companies or possess any detailed knowledge of their affairs.

ASIC also found that the companies operated schemes that were unlikely to provide any return to investors.

ASIC disqualified takeaway food distributors, Messrs Jon Ian Gisler and Ian Edward Gilser of Cleveland, Queensland, from managing corporations for five years and four years respectively.

Jon and Ian Gisler’s disqualifications followed an ASIC investigation into their roles in two failed companies, Gislers Enterprises Pty Ltd and Gisgroup Investments Pty Ltd and, in addition, Jon Gisler’s involvement in another failed company,

Bradman Street Pie Company Pty Ltd.

ASIC’s investigation found that Jon and Ian Gisler failed to ensure that the companies maintained proper financial records, that they allowed the companies to incur debts while they were insolvent, and that they failed to provide the liquidator of Gisler Enterprises Pty Ltd with a report as to the affairs of the company.

ASIC also found that the same business was carried on through each of the companies, which all failed owing substantial amounts to unsecured creditors and the Australian Taxation Office.

ASIC disqualified property investor and venture capital provider, Mr Ross John Whitehead, of Bulimba, Queensland, from managing corporations for four years.

Mr Whitehead’s disqualification followed an ASIC investigation into his role in

11 failed companies, E-Gistics Services Pty Ltd, Coldchain Distribution Services Pty Ltd, Food Service Direct (Qld) Pty Ltd, Marinearena Brokers Pty Ltd, Bi-Well Pty Ltd, Oceanic Technologies People Pty Ltd, Gedx Pty Ltd, E-Gistics.com Pty Ltd, Mysupacentre Management Pty Ltd, E-Gistics Coldline Services Pty Ltd and Myfoodlink.com.au Pty Ltd.

ASIC’s investigation found that Mr Whitehead failed to submit reports as to affairs and deliver all the books and records and property of Coldchain Distribution Services Pty Ltd, Food Service Direct (Qld) Pty Ltd, Marinearena Brokers Pty Ltd and Myfoodlink.com.au Pty Ltd and that he failed to ensure that Bi-Well Pty Ltd, Oceanic Technologies People Pty Ltd, Gedx Pty Ltd and E-Gistics.com Pty Ltd maintained proper financial records.

ASIC also found that Mr Whitehead failed to exercise his powers and discharge his duties as a director of Oceanic Technologies People Pty Ltd when he transferred the assets and business of Oceanic Technologies People Pty Ltd to an associated company.

ASIC disqualified architect, Mr Denis Mullins, of Taringa, Queensland, from managing corporations for three years.

Mr Mullin’s disqualification followed an ASIC investigation into his role in two failed companies, Rafford Pty Ltd and DM Consultants Pty Ltd.

ASIC also found that Mr Mullins failed to prevent DM Consultants Pty Ltd from incurring a debt despite knowing the company was insolvent and that he allowed Rafford Pty Ltd to trade while it was insolvent.

ASIC disqualified business consultant, Mr Graeme Jeffrey Boorer, of Kirrabilli,

New South Wales, from managing corporations for two years.

Mr Boorer’s disqualification followed an ASIC investigation into his role in three failed companies, Customer Strategies Pty Limited, Entrepo Pty Limited and Techontap International Limited.

ASIC’s investigation found that Mr Boorer failed to ensure that Customer Strategies Pty Ltd and Entrepo Pty Ltd maintained proper books and records and that he allowed Techontap International Limited to trade while it was insolvent.

ASIC also found that Mr Boorer made a false statement to ASIC when he authorised the lodgement of documents with ASIC which appointed two directors to Techontap International Limited when they had not consented to be directors.

The above disqualified individuals have the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.

‘Phoenix activity’ is typically associated with directors who transfer the assets of an indebted company into a new company of which they are also directors. The initial company is then placed into administration/liquidation with no assets to pay creditors and operates under a new company structure.