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Tuesday 17 December 2019

19-359MR ASIC disqualifies director for five years for engaging in illegal phoenix activity

Timothy Elgan Marsh, of Epping, NSW, has been disqualified by ASIC from managing companies for the maximum period of five years for his involvement in two failed companies – SME Fleet Pty Ltd ACN 605 623 523 (SME Fleet) and New Cars Plus Pty Ltd ACN 148 039 016 (New Cars Plus).

ASIC found that Mr Marsh: 

  • improperly used his position as a director by engaging in illegal phoenix activity when he transferred the business of New Cars Plus to another company of which he was the sole director;
  • demonstrated poor compliance by failing to lodge Business Activity Statements and income tax returns;
  • failed to keep adequate written financial records;
  • failed to assist a liquidator;
  • failed to ensure that his companies paid prescribed fees to ASIC.

SME Fleet and New Cars Plus collapsed owing creditors a total of $30,745,680, which included $30,656,648 that was owed to the ATO.

In making the decision to disqualify Mr Marsh, ASIC relied on reports lodged by liquidators of SME Fleet and New Cars Plus. The liquidators of SME Fleet Pty Ltd and New Cars Plus Pty Ltd received funding from the Assetless Administration Fund to prepare supplementary reports that ASIC used in making its decision to disqualify Mr Marsh.  

Mr Marsh's disqualification took effect from 1 December 2019 and extends to 30 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.

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. More information about the Assetless Administration Fund is available here.

Suspected phoenix activity can be reported to the Phoenix Taskforce on 1800 060 062 or online at the ATO website.

Last updated: 18/12/2019 02:44