The Federal Court has dismissed an appeal from a decision of the Administrative Appeals Tribunal, affirming ASIC's decision to disqualify Mr Lubo Zivanovic, of Bilgola Beach, NSW, from managing corporations for three years.

ASIC disqualified Mr Zivanovic on 18 February 2016, following his involvement in the management of numerous failed companies, namely:

- Oneover Pty Ltd (ACN 105 854 475);　

- Bargara Rentals Pty Limited (ACN 123 819 876);　

- Bargara Services Pty Limited (ACN 106 082 268);

- Backvet Pty Ltd (ACN 104 664 422); 

- Markaway (NSW) Pty Ltd (ACN 070 008 507);

- Toandtwo Pty Ltd (ACN 118 706 291);

- Girraween Scaffold (Australia) Pty Ltd (ACN 129 942 132);

- Mountrich Pty Ltd (ACN 129 457 834);

- Devlaw Pty Ltd (ACN 073 291 960);

- Muneemake Pty Ltd (ACN 105 501 102);

- Tinaduke Pty Ltd (ACN 127 655 805);

- Cebakay Pty Ltd (ACN 105 855 749);

- Invotow Pty Ltd (ACN 105 008 044);

- Kakconab Pty Ltd (ACN 135 880 625);

- Ezocom Pty Ltd (ACN 127 199 713);

- Fratocom Pty Ltd (ACN 090 682 752);

- Notxituk Pty Ltd (ACN 068 575 922); and

- Twooftwo Pty Ltd (ACN 096 737 450).　

All the companies managed by Mr Zivanovic operated in the building and construction industries and were wound up in liquidation between 2008 and 2014. Liquidators lodged reports for all 18 companies, alleging each company was insolvent and had failed to keep books and records. The total estimated deficiency by the liquidators was $26,855,268.

The liquidators of Noxituk Pty Ltd and Ezocom Pty Ltd also lodged supplementary reports with ASIC that alleged these companies failed due to Mr Zivanovic’s poor management and control, extremely large debts that were accrued, their failure to pay tax and lack of company records.

Mr Zivanovic appealed ASIC’s disqualification decision to the AAT and obtained suppression orders that prevented ASIC from disclosing his disqualification. On 8 August 2017, the AAT affirmed ASIC's decision. Mr Zivanovic then appealed the AAT's decision. On 17 May 2018, the Federal Court dismissed Mr Zivanovic's appeal. Mr Zivanovic is now disqualified from managing corporations until 18 February 2019.

Background

Section 206F of the Corporations Act 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 about the company’s inability to pay its debts.

ASIC provided funding from the Assetless Administration Fund (AAF) that assisted the liquidators to undertake further enquiries and prepare reports that were subsequently used by ASIC to disqualify Mr Zivanovic.

ASIC maintains a public register of banned and disqualified persons 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
• disqualified from practising in the financial services of credit industry.

Editor's note:

On 23 May 2018, this media release was edited to clarify the process of affirmation.