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Friday 15 November 2019

19-312MR ASIC disqualifies director from managing companies for maximum five years

Keith John Lemon of The Entrance, NSW, has been disqualified by ASIC from managing companies for the maximum period of five years.

Mr Lemon was disqualified for his role in the failure of a number of companies, including Risett Pty Ltd ACN 128080179, Extreme Mechanical Services Pty Ltd ACN 153862081and PPW Engineering Pty Ltd ACN 122987035.

ASIC found that Mr Lemon:

  • improperly used his position as a director;
  • failed to prevent a company from trading whilst insolvent;
  • failed to exercise his powers and discharge his duties with due care and diligence by continuing to accrue taxation liabilities;
  • demonstrated poor compliance by failing to lodge Business Activity Statements and income tax returns;
  • failed to submit a Report as to Affairs to a liquidator or to provide company books to a liquidator; and
  • failed to keep adequate written financial records. 

The companies collapsed owing fourteen creditors a total of $11,006,481.

In making the decision to disqualify Mr Lemon, ASIC relied on reports of possible offences lodged by liquidators of the failed companies. In particular, the liquidators of Risett Pty Ltd and Extreme Mechanical Services Pty Ltd received funding from the Assetless Administration Fund to prepare supplementary reports.  

Mr Lemon is disqualified from managing companies from 6 November 2019 to 5 November 2024.

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 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.

Information about the Assetless Administration Fund and its role in assisting liquidators carry out proper investigations and preparing reports for ASIC is available here.

Last updated: 15/11/2019 12:42