ASIC disqualifies three unrelated directors in construction and hospitality for up to five years.
Banned directors leave nine failed companies and $16m debt
Three directors with combined debts exceeding $16 million and involvement in a total of nine failed companies have been disqualified by ASIC for terms ranging up to five years.
The unrelated directors included two in the construction industry and a third in hospitality.
Desley Soong of Concord, NSW, was banned from managing corporations for two years after her involvement in three failed companies operating in building and construction between 1970 and 2020.
The companies – Wyreach Pty Ltd, ACN 000 842 606 Pty Ltd (formerly Fyna Constructions [Hire and Sales] Pty Ltd) and Span Form Pty Ltd – together owed $8.1 million to unsecured creditors, including $1.9 million owed to the ATO and $384,934 to NSW Office of State Revenue.
ASIC found that Mrs Soong failed to exercise her powers and discharge her duties with the requisite degree of care and diligence by:
- Allowing all three companies to accumulate ATO debts
- Allowing Span Form to accumulate a payroll tax debt with NSW
- Failing to ensure Fyna and Span Form maintained adequate books, including BAS and taxation returns
- Allowing Span Form to continue trading while insolvent
Mrs Soong is disqualified from managing corporations until 2 June 2024.
Another construction industry director, Joshua Ian Ridley of Helensvale, Queensland, has been disqualified from managing corporations for a maximum of five years due to his involvement in the failure of six companies.
Between April 2009 and November 2021, Mr Ridley acted as the director of six companies that operated in the construction industry:
- Disco Holdings Pty Ltd
- Tiger Trac Pty Ltd
- Dalrimple Investments Pty Ltd
- Rocor Holdings Pty Ltd
- CTE (Aust) Pty Ltd
- Tiger Mech Pty Ltd
The companies owed a total of $7,144,033 to creditors, including $2,991,983 to the ATO.
ASIC found Mr Ridley acted improperly and failed to meet his obligations as director when he:
- Failed to ensure that Disco Holdings, Tiger Trac, Rocor Holdings, CTE (Aust) and Tiger Mech paid their statutory debts to the ATO
- Failed to ensure Disco Holdings and Tiger Trac complied with their ATO lodgement obligations
- Improperly used his position as the director of Disco Holdings by disposing of assets, equipment and vehicles in circumstances where the proceeds for those disposals were not properly accounted for, and by personally receiving the proceeds of the sale
ASIC also found Mr Ridley failed to ensure proper ownership records at Disco Holding, transferred Tiger Trac assets improperly, allowed debts to accrue at Disco Holdings and Tiger Trac when there were reasonable grounds for suspecting they were insolvent, failed to keep proper financial records at Disco Holdings and Tiger Trac, and continued to manage Disco Holdings while he was disqualified from managing corporations.
Mr Ridley is disqualified from managing corporations until 20 June 2027.
Another Sydneysider, Gunashaker Senthamilselvan of Baulkham Hills, has been disqualified from managing corporations for four years due to his involvement in the failure of two companies.
Between October 2014 and September 2021, Mr Senthamilselvan was the director of two companies that operated in the restaurant industry: Poongothai Pty Ltd and Adhie Anna Pty Ltd.
Poongothai operated two restaurants both trading under the name The Grand Pavilion Indian Restaurant from leased premises at Warners Bay and Terrigal in NSW. Adhie Anna operated a restaurant trading under the name The Grand Pavilion Indian Restaurant in Sydney, NSW.
Poongothai owed a combined total of $1,315,698.17 to unsecured creditors, including $445,947.39 owing to the ATO while it is unclear how much is owed by Adhie Anna as no books and records were provided to the liquidator.
ASIC found that Mr Senthamilselvan acted improperly and failed to meet his obligations as director when he:
- Failed to ensure Poongothai complied with its statutory obligations to lodge various documents with the ATO
- Allowed Poongothai and Adhie Anna to incur debts where there were reasonable grounds for suspecting that the company was not in a position to pay them.
- Negotiated and assisted with the transfer of Poongothai and Adhie Anna’s business to an unrelated party, for no consideration
- Used $157,217 of Poongothai company funds for what appear to be personal expenses
- Attempted to recover Poongothai’s bond paid in relation to the Warners Bay lease
- Failed to take all reasonable steps to secure compliance with its obligation to retain Adhie Anna’s financial records for seven years
- Deposited the bond or security deposit of Adhie Anna into his personal account, following the surrender of the lease of the Sydney premises
Mr Senthamilselvan is disqualified from managing corporations until 16 June 2026.
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 maintains a banned and disqualified persons register.