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Tuesday 29 April 2014

14-090MR ASIC bans Sydney directors following company failures

ASIC has banned Sydney chef Mr Justin Russell North and his wife Georgina North from managing corporations following their involvement in the failure of three companies.

Mr and Mrs North were banned for two years and 18 months respectively, effective from 4 April 2014.

Liquidators were appointed to Becasse Pty Limited on 20 June 2012, and to Etch Restaurant Pty Limited and North Food Catering Pty Limited on 20 July 2012.

ASIC found Mr and Mrs North failed to exercise their powers and discharge their director's duties with the requisite degree of care and diligence.

This failure, ASIC found, resulted in large deficiencies owed to creditors totalling a combined sum of over $7 million for the three companies.

ASIC Commissioner Greg Tanzer said, ‘ASIC's power to disqualify directors of failed companies is an important preventative measure used by ASIC to safeguard the public interest.'

Persons banned by ASIC have a right to appeal their banning to the Administrative Appeals Tribunal, and may lodge their appeal within 28 days.

Background

Section 206F of the Corporations Act 2001 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.

In July 2010, ASIC issued Regulatory Guide 217 Duty to prevent insolvent trading: Guide for directors (RG 217). ASIC also maintains a banned and disqualified person register that provides information about people who have been:

  • disqualified from involvement in the management of a corporation

  • disqualified from auditing self-managed superannuation funds (SMSFs), or

  • banned from practising in the financial services or credit industry.

Last updated: 29/04/2014 12:00