ASIC has banned former Provident Capital managing director Michael Roger O’Sullivan from managing a corporation for five years.
ASIC found that Mr O’Sullivan used his position “improperly to gain financial advantages for himself and for a company of which he was formerly a director”.
Over 3,000 Provident debenture holders were owed approximately $130 million when the company went into liquidation on 24 October 2012.
Mr O’Sullivan failed to manage and record the largest loan made by the company through its Fixed Term Investment Portfolio, an ASIC-issued statement said.
Mr O’Sullivan subsequently issued a Debenture Prospects in December 2010 – which included false documentation – in order to raise funds from the public.
“Provident Capital issued debentures to retail investors through their Fixed Term Investment Portfolio and advanced the debenture funds to third party borrowers, including property developers, on a first mortgage basis,” ASIC said.
ASIC commissioner John Price said: “Directors have a responsibility to ensure that statements made to investors are true and reliable.”
“Failing to meet this simple obligation undermines confidence and trust in the corporate and financial services communities.
“Managing companies and providing financial services requires compliance with important obligations.
“ASIC will remove those who fail to meet these obligations,” Mr Price said.
ASIC suspended the company’s financial services licence in October 2012.
The investigation into Mr O’Sullivan is continuing.
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