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16-037MR ASIC disqualifies Sydney director
ASIC has disqualified Mr Michael John Teys of Sydney from managing corporations for five years following his involvement in the failure of three companies. The disqualification commenced on 29 January 2016 and ceases 28 January 2021.
The disqualification follows an ASIC investigation which found that Mr Teys breached his duties as a director, including failing to comply with financial services laws.
Mr Teys was the director of:
- ACN 127 707 671 Pty Ltd (formerly known as Teys Lawyers Pty Ltd) ACN 127 707 671 (Teys Lawyers),
- TPFL Ltd ACN 105 164 047 (TPFL), and
- TPL Holdings Pty Ltd ACN 010 892 243 (TPL).
Each of these companies was placed into liquidation between 20 April 2010 and 3 June 2014.
ASIC found that Mr Teys managed the affairs of Teys Lawyers, TPFL and TPL well short of the standards required of someone in his position as Mr Teys:
- Managed Teys Lawyers and TPL such that each incurred a deficiency;
- Managed Teys Lawyers such that it preferred trade creditors over the ATO and in so doing acted with a lack of commercial morality;
- Used his position as a director of Teys Lawyers and TPL improperly to gain financial advantages for himself and other related parties;
- Failed to exercise due care and diligence in the management of a number of loans made by TPFL through its registered managed investments schemes.
- Failed to exercise due care and diligence to ensure that Teys Lawyers and TPFL lodged documents with both the ATO and ASIC.
Liquidators reported that the total deficiencies owed to creditors exceeded $5 million across all three companies.
ASIC Commissioner Greg Tanzer said, 'Directors have a responsibility to manage the financial affairs of their company in accordance with the law. As this case shows, directors who cause or permit their company to breach legal obligations can face significant consequences.'
Mr Teys has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
The five year period for which Mr Teys was banned from managing corporations is the maximum period of disqualification that ASIC can impose under section 206F of the Corporations Act 2001.
Teys Lawyers traded as a legal services business specialising in strata law and was previously known as Michael Teys Strata Law Pty Ltd, Teys Lawyers Pty Ltd, and ACN 127 707 671 Pty Ltd.
TPFL held an Australian Financial Services License and as a responsible entity operated a number of registered managed investments schemes including:
- Teys Strata Mortgage Trust ARSN 108 137 195;
- Teys Strata Development Trust ARSN 1129 939 509;
- The Teys Income Builder ARSN 110 052 429;
- Dunsborough Hotel Property Syndicate ARSN 098 946 733;
- Teys Strata Lifestyle Property Trust ARSN 096 588 108;
- Sydney Apartments Trust ARSN 121 041 405;
- Teys Fixed Income Trust ARSN 121 041 503;
- Broadwater Bungalows ARSN 090 521 163;
- Teys Retirement Property Trust No 1 ARSN 112 939 705; and
- Settlers Lifestyle Property Trust ARSN 112 939 572
TPFL went into external administration on 5 March 2010. ASIC cancelled TPFL's Australian Financial Services license on 22 March 2010.
This matter received funding from ASIC under the Assetless Administration Fund to fund the Liquidator of TPL to prepare a supplementary report for the purposes of ASIC to consider a banning Mr Teys pursuant to Section 206F of the Corporations Act 2001 (the Act).