Former Continental Coal director, Ashley Paul D’Sylva, of Leederville, Western Australia, has been sentenced to eight months’ imprisonment to be released immediately upon entering into a recognisance release order in an amount of $5,000 and to be of good behaviour for 18 months, for one count of breaching s184(1)(a) of the Corporations Act 2001 (Cth).
Dr D’Sylva, through his company Empire Equity, sourced $1 million of bridging finance from Celtic Capital to facilitate the recapitalisation of Continental Coal.
Between 21 and 25 February 2014, Dr D’Sylva arranged the repayment of $915,000 to Celtic Capital Pty Ltd, contrary to the terms of a Standstill Deed that Continental Coal had entered into.
Dr D’Sylva pleaded guilty to one charge of recklessly failing to exercise his powers for a proper purpose while a company director of former ASX-listed company, Continental Coal Limited (in Liquidation).
Continental Coal entered into liquidation in 2016.
When handing down the sentence, The Honourable Justice Forrester remarked on the fundamental duties of company directors to act in the best interests of the company and that in failing to do so, Dr D’Sylva jeopardised the trust of investors, shareholders and those that would invest. Her Honour further noted that notwithstanding the urgency and pressure arising from the recapitalisation of Continental Coal, it is during such difficult times that rigorous compliance with directors’ duties is most important.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions after an investigation and referral by ASIC.
Background
Dr D’Sylva was charged on 28 August 2020 with co-accused Mr Peter Landau and Ms Jane Flegg (20-201MR). Mr Landau pleaded guilty to nine charges in relation to Continental Coal and Citation Resources Limited and will be sentenced in the Supreme Court of Western Australia on 20 June 2023 (22-224MR). Ms Flegg has pleaded not guilty and her matter is currently listed for trial from 5 February to 11 March 2024.
ASIC’s investigation was assisted by the receipt of a comprehensive report prepared by Continental Coal’s liquidator. ASIC assisted the liquidator to investigate and report their findings by providing funding from the Assetless Administration Fund.
Mr Robert Kirman of McGrathNicol was appointed liquidator of Continental Coal on 25 May 2016.
The maximum penalty for breaching directors duties at the time of Dr D’Sylva’s offending was five years imprisonment and/or a $340,000 penalty. The maximum penalty has since increased to 15 years imprisonment.