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Friday 4 March 2022

22-038MR ASIC disqualifies NSW labour hire company director from managing companies after involvement in illegal phoenix activity

ASIC has disqualified Keith Aaron Richard Kimmins of Forrest Reefs, NSW, from managing corporations for three years and eight months due to his involvement in the failure of three companies.

Between 2009 and 2019 Mr Kimmins was a director of three companies:

  • 2K Container Services Pty Ltd (ACN 136 721 376);
  • 2K Labour Services Pty Ltd (ACN 603 411 847); and
  • Australian Labour Solutions (NSW) Pty Ltd (ACN 610 669 773).

2K Container Services was in the business of providing freight and logistic services .  2K Labour Services and Australian Labour Solutions provided labour hire to 2K Container Services.

ASIC found that Mr Kimmins lacks the basic skills and knowledge required to manage a company in that he:

  • failed to ensure the companies kept proper financial records;
  • failed to keep informed about the financial position and performance of the companies;
  • failed to ensure the companies complied with their tax obligations;
  • allowed 2K Container Services and Australian Labour Solutions to trade while insolvent;
  • allowed company funds to be used for the benefit of himself and related parties;
  • engaged in illegal phoenix activity by transferring 2K Labour Services’ business to Australian Labour Solutions, and subsequently to 2K Container Services.

At the time of ASIC’s decision, the three companies owed a combined total of $4,016,588 to creditors (including related parties), including $2,270,592 owing to the ATO.

In disqualifying Mr Kimmins, ASIC relied on supplementary reports lodged by 2K Container Services and 2K Labour Services’ liquidator, Adam Shepard of Setter Shepard, and Australian Labour Solutions’ liquidator, Louisa Sijabat of Vincents Chartered Accountants. ASIC assisted Ms Sijabat to prepare her report by providing funding from the Assetless Administration Fund.

Mr Kimmins is disqualified from managing corporations until 17 October 2025.

Mr Kimmins has the right to seek a review of ASIC’s decision by the Administrative Appeals Tribunal.

Background

Section 206F of the Corporations Act allows ASIC to disqualify a person from managing corporations for a maximum period of 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 each of 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 or credit industry.

More information about ASIC’s work in combatting illegal phoenix activity can be found here.

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 ASIC or the ATO by calling 1800 060 062, online at the ATO website or by emailing PhoenixReferrals@ATO.gov.au.

Last updated: 04/03/2022 02:25