ASIC has banned 22 directors from managing companies for 82 years over the past nine months, further demonstrating its commitment to promoting consumer confidence in Australian corporations.
ASIC Deputy Executive Director of Consumer Protection, Ms Delia Rickard, said the disqualifications follow complaints from the general public and business community and illustrate the regulator’s power to remove individuals who are directors of two or more failed companies from the industry.
‘These results clearly show that ASIC is committed to weeding out those who have failed to uphold their duties and obligations as company officers,’ Ms Rickard said.
In its latest action, ASIC has banned a piggery owner and company director in New South Wales from managing corporations for two years.
Mr Douglas Bennett of Eastwood in News South Wales was banned following an investigation into his involvement in two failed companies, Raoc-Rac Pty Ltd and XLNT Corrugated Packaging Pty Ltd.
XLNT and Raoc-Rac Pty Ltd were wound up in March and April respectively owing in excess of $1.5 million. Both companies were unable to pay creditors more than 50 cents in the dollar.
ASIC found that Mr Bennett had breached the Corporations Act in demonstrating an obvious disregard for his duties and responsibilities. As a director, Mr Bennett was unable to successfully operate his companies, failing to maintain adequate books and records and allowing the companies to trade whilst insolvent.
Once placed into liquidation, Mr Bennett then sought to hinder investigations in an attempt to conceal assets and evade scrutiny. Mr Bennett’s actions resulted in loss to a number of creditors including employees who are still owed outstanding employee entitlements and superannuation payments.
‘ASIC will take action against company officers who hamper the role of a liquidator in assessing how much the failed company might be able to return to creditors. Where company officers are uncooperative and refuse to provide information on the company’s finances and history, ASIC will step in and take whatever action is necessary,’ Ms Rickard said.
Background
The Corporations Act provides that ASIC may disqualify a person who has been a director of two or more failed corporations within seven years that have been wound up and their liquidator has lodged a report with ASIC about the corporations' inability to pay its debts.
The number of disqualifications detailed in this release does not include court bannings imposed as a result of proceedings initiated by ASIC.