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19-112MR ASIC disqualifies director from managing companies after engaging in phoenix activity
ASIC has disqualified Mr Abdoul Rahim Fatrouni of Meadow Heights, Victoria, from managing corporations for 3 years and 6 months following his involvement in the failure of three companies.
The disqualification follows the appointment of liquidators to the following companies:
- ARP Plumbing Pty Ltd ACN 147 799 531 (ARP Plumbing);
- ARP Roofing Pty Ltd ACN 161 329 086 (ARP Roofing); and
- DIY Roofing Australia Pty Ltd ACN 610 479 082 (DIY Roofing).
After review of the liquidator reports, ASIC found that Mr Fatrouni:
- misused the corporate form by transferring the business of one indebted company, leaving insufficient assets to pay creditors, whilst continuing what was essentially the same business;
- in regard of ARP Roofing and DIY Roofing, failed to exercise his powers and discharge his duties as director with the degree of due care and diligence required by a director in that he failed to ensure statutory lodgements for ARP Roofing and DIY Roofing for more than five years;
- failed to maintain adequate records for ARP Roofing, with more than three years’ worth of transactions totalling more than $2,500,000 unable to be substantiated;
- in regard to ARP Roofing and DIY Roofing, failed to maintain adequate financial records.
Liquidators of the companies reported that the combined total amount owed to creditors exceeded $1.2 million.
The liquidators for ARP Roofing and DIY Roofing received funding from the Assetless Administration Fund to prepare and report their findings to ASIC.
Mr Fatrouni’s disqualification commenced on 8 May 2019 and will cease on 8 November 2022.
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 also maintains a 'Banned and Disqualified Persons' register that provides information about people who have been disqualified from:
- involvement in the management of a corporation;
- auditing self-managed superannuation funds (SMSFs); or
- practising in the financial services of credit industry.
ASIC is a member of the Phoenix Taskforce, which comprises federal, state and territory government agencies who collaborate to combat illegal phoenix activity. The aim of the Phoenix Taskforce is to provide a whole-of-government approach to identify, disrupt and prosecute those who engage in or facilitate illegal phoenix activity.
Suspected phoenix activity can be reported to the Phoenix Hotline on 1800 807 875 or online at the ATO website.