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The corporate regulator has warned it is taking tougher action against directors who avoid tax, fail to lodge tax returns and refuse to assist liquidators.
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ASIC swoops on dodgy directors with collapsed companies
21 October 2024
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ASIC prosecuted 68 individuals from 1 July to 30 September who failed to assist liquidators following the collapse of their company. It also disqualified three company directors, with two receiving disqualifications for the maximum period of five years.
The Commonwealth Director of Public Prosecutions also continued prosecutions against two directors for dishonest conduct relating to company money.
In a recent update, ASIC said these criminal prosecutions and administrative actions were taken due to tax avoidance, failure to lodge tax returns, and failure to pay employee entitlements including wages and superannuation.
The prosecutions also related to failing to maintain proper books and records and conduct that was not in the best interests of the company, including illegal phoenix activity and insolvent trading.
The corporate regulator said it is committed to protecting the interests of small businesses and acting against directors who fail to properly manage their companies and assist liquidators after a company collapses.
"ASIC does this by taking administrative and court action for breaches of duties," it said.
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"These actions result in directors being disqualified and convicted, and protect the wider public, employees and other small businesses against the future mismanagement of companies."
ASIC said the failure of these directors to meet their statutory obligations adversely impacted many small business creditors across a range of industries including construction, property development, transport, warehousing and freight.
"These failures left many creditors unpaid including other small businesses, employees, and the ATO."
Company directors should obtain trusted professional advice if they are uncertain about their legal obligations or have concerns about their company's ability to continue to trade or pay its debts, ASIX said.
The corporate regulator said it recently handed down five-year disqualifications to Richard Sparreboom and Graeme Doble. It also disqualified Victorian director Benjamin Anderson for four years following his involvement in seven failed companies that owed a combined total of $35,610,506.
Anderson’s companies were concerned with construction, property development and project management.
ASIC found that Anderson acted improperly, allowing one company, Australian Public Custodian Ltd (APC) to allegedly trade while insolvent and to have undocumented and unsecured loans between APC and related parties.
ASIC also claimed that Anderson failed to maintain proper books and records and to comply with statutory lodgements, including income tax returns with the ATO.
In disqualifying these directors, ASIC relied on supplementary reports lodged by certain liquidators after ASIC approved funding from the Assetless Administration Fund.
The liquidators of Anderson’s companies were Glenn Spooner of Cor Cordis, Robert Ditrich of PwC and Liam Bellamby of RRI Advisory.
Directors may be disqualified from managing a corporation for a maximum of five years.
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