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21-206MR Victorian director disqualified from managing corporations for five years
David Brandi of Toorak, Victoria, has been disqualified from managing corporations for five years after his involvement in the failure of three companies.
Mr Brandi is a registered accountant and former tax agent, and the former or shadow director of three Victorian companies that had liquidators appointed between 2014 and 2019:
- Sputnik Holdings Pty Ltd (ACN 132 646 336) (Sputnik);
- Independent Tube Mills Pty Ltd (ACN 136 627 186) (ITM); and
- Melbourne Property Group Pty Ltd (ACN 104 427 214) (MPG).
ITM operated a steel manufacturing business and was acquired by Sputnik. MPG provided business and personal services.
In making its decision, ASIC found that Mr Brandi breached his directors’ duties by:
- Failing to act with care and diligence to comply with tax lodgment obligations for both Sputnik and ITM;
- Failing to take reasonable steps to ensure that Sputnik kept written financial records;
- Failing to provide the liquidator of Sputnik with information about the company’s business, property, affairs and financial circumstances;
- Either failing to maintain adequate books and records for ITM or failing to provide the liquidator of ITM with the company’s books;
- Improperly using his position as director of Sputnik to gain an advantage for himself or someone else, or cause detriment to the company, by:
- entering into an asset sale agreement with a related entity and leaving large liabilities in Sputnik; and
- entering into a deed of assignment on behalf of Sputnik assigning all its rights to claims, insurance policies and any other rights to a related entity that resulted in an insurance payout of over $2 million that Sputnik was entitled to being instead paid to the related entity; and
- Demonstrating that he does not understand the role and duties of a director or has chosen to not perform them adequately.
The total amount owed to creditors across all three companies is approximately $73.7 million, of which approximately $12.8 million is owed to the Australian Taxation Office (ATO).
In making its decision, ASIC relied on supplementary reports lodged by Stephen Michell of PCI Partners as the liquidator of Sputnik, and Michael Quin of Bent & Cougle as the liquidator of ITM. ASIC assisted Mr Michell in preparing his supplementary report by providing funding from the Assetless Administration Fund.
Mr Brandi was disqualified by ASIC from managing corporations until 26 May 2026 and this was extended until 29 July 2026 after being convicted of fraud offences brought by the ATO.
On 27 May 2021, Mr Brandi filed a stay and confidentiality application in the Administrative Appeals Tribunal (AAT) which previously prevented ASIC from publicising its decision.
On 30 July 2021, in separate proceedings, Mr Brandi pleaded guilty and was convicted on two counts of fraud relating to an ATO investigation. He was sentenced to two years imprisonment and released on a good behaviour bond.
As a result of his ATO convictions, Mr Brandi is automatically disqualified from managing corporations for a period of five years until 29 July 2026.
Mr Brandi withdrew his AAT application against ASIC and is now disqualified until 29 July 2026.
Section 206F of the Corporations Act gives ASIC the power 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 that were wound up and the liquidators lodge reports with ASIC about each company’s inability to pay its debts or alleging misconduct.
ASIC 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
- practicing in the financial services or credit industry.
Section 206B of the Corporations Act deals with automatic disqualifications, in that a person becomes disqualified from managing corporations for five years if they are (among other things) convicted of an offence that involves dishonesty and is punishable by imprisonment for at least three months.