Between June 2009 and September 2009, ASIC disqualified 15 directors from managing corporations for a combined total of over 50 years, following their involvement in failed companies.

Of these disqualified directors, ten were from New South Wales, three from Victoria and two from Queensland.

The disqualifications are a result of ASIC’s ongoing commitment to removing directors from the management of companies where they have failed to fulfill their responsibilities relating to the running of the company, or after the company has been placed in external administration. Further, it serves as a deterrent to dissuade other directors from failing to act responsibly in managing the affairs of their businesses.

These actions also protect members of the public, including future creditors and employees, who may otherwise be involved with a director who has a history of being involved in failed companies where that director’s conduct directly contributed to the failure of those companies.

Twelve of the disqualifications were assisted by the receipt of reports from liquidators who had received funding through the Assetless Administration Fund (AA Fund).

The AA Fund, which is administered by ASIC, was established to assist liquidators carry out more detailed investigations into the circumstances of a company failure and, where appropriate, in referring director misconduct to ASIC.

Details of the directors banned between June 2009 and September 2009 are provided as an attachment to this advisory. All of the directors named have had the right to lodge an application with the Administrative Appeals Tribunal (AAT) for a review of ASIC’s decision. One director has lodged such an application to date.

ASIC’s register of banned and disqualified persons can be found at www.asic.gov.au.

Background

Section 206F of the Corporations Act provides that ASIC may 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.

Download the list of banned directors (PDF)  - This file has been removed in accordance with our policy in Information Sheet 152 Public comment on ASIC's regulatory activities.