ASIC has begun the New Year with a sweeping crackdown on company directors of failed businesses across Australia.
The regulator disqualified nine directors from managing corporations following allegations of unlawful dealings in their failed companies.
It also removed 40 directors in what it said was a response to ‘systematic misbehaviour of company officers who deliberately avoid their responsibilities to creditors’.
ASIC chairman Jeffrey Lucy said the regulator was increasing its focus on ‘phoenix activity’ – individuals who put companies with no assets into liquidation, leave behind unpaid creditors, and transfer the assets into a new company.
In a separate investigation, it prosecuted 162 officers of failed companies, fining each one on average $1000. The regulator said officers hid from creditors by failing to update addresses and failed to assist liquidators and administrators.
ASIC also moved in on Sydney-based finance spruiker Atan Ona Kassongo who is alleged to be involved in the operation of an unlicensed financial services business offering people early access to their superannuation funds.
Kassongo’s passport has been confiscated and he is prevented him from working in financial services or dealing with company assets.
The regulator also took steps to wind up unregistered Melbourne-based investment schemes HLP Financial Planning, Leaberl and Beachmere View and 13 associated companies.
It alleged there are at least 55 investors who loaned $5 million in high yield schemes who were not given appropriate information and legal protection. It said the director of the schemes, Peter Berlowitz, cannot repay investors their money.
In separate investigations, two former Macquarie Bank employees, Trevor Lam and Julian Hayes, were banned from providing financial services. ASIC said Lam had transferred money between clients’ accounts without the authority to do so while Hayes failed to provide Statements of Advice to nine clients in a timely manner.
Meanwhile the regulator has cancelled the licence of Gold Coast construction lending company Sovereign Capital Limited.
ASIC said the firm’s activities were well below minimum standards expected of a financial services licensee and the majority of its high risk, high return mezzanine loans were in default.
