ASIC bans 2 directors for 6 failed companies, $3m in debts
Regulator finds range of misbehaviour from lack of tax lodgment to trading while insolvent.
ASIC has disqualified two unrelated directors for the failure of a total of six companies owing $3 million to unsecured creditors, including $1.75 million to the ATO.
The companies were involved in the installation, maintenance and servicing of fibre optic networks in the telecommunication industry.
ASIC found Mr Reid had:
- Failed to ensure that BMT Group Services complied with its statutory obligations, including the lodgement of income tax returns.
- Allowed BMT Group Services to enter into an unsecured loan with him to the value of $497,351 as at 30 June 2021, in circumstances where no formal loan documents were executed and at a point where BMT Group Services was experiencing financial difficulty from 30 June 2019 onwards.
- Caused BMT Communications to pay creditors and make repayments on behalf of BMT Group Services and BMT Contracting.
- Allowed BMT Group Services to continue incurring debts when it was insolvent.
- Failed to ensure that BMT Group Services and BMT Communication complied with its obligation to keep true and accurate financial records.
At the time of the decision, the companies owed a combined total of $1,167,251.49 to unsecured creditors, including $274,985.32 to the ATO.
In disqualifying Mr Reid, ASIC relied on supplementary reports lodged by BMT Group Services liquidator, Con Kokkinos of Worrells and BMT Communications liquidator, Justin Howlett of SMB Advisory.
Mr Reid is disqualified from managing corporations until 28 June 2027 and has the right to seek a review of ASIC’s decision by the AAT.
ASIC has also disqualified Wayne Thomas Williamson of Stanhope Gardens, NSW, for three and a half years due to his involvement in the failure of three companies: Active Towing Sydney, Ryde & District Smash Repairs and Active Towing Enterprises.
Active Towing Sydney was involved in towing and motor vehicle repair services, Ryde & District Smash Repairs provided labour hire services to Active Towing Enterprises, and Ryde & District Smash Repairs provided towing services to another entity.
Mr Williamson was director of the three companies between March 1991 and November 2020.
ASIC found that Mr Williamson had:
- Failed to ensure the companies complied with their ATO statutory lodgement obligations.
- Entered into a sale agreement that deprived Active Towing Sydney of its only income generating assets.
- Circumvented employment law obligations at Active Towing Sydney.
- Failed to ensure the companies kept financial records.
- Failed to prevent Ryde & District Smash Repairs from incurring debts when there were reasonable grounds to suspect it was insolvent.
In December 2021, the Federal Circuit and Family Court found that Active Towing Sydney had breached the Fair Work Act 2009 in deducting amounts from the wages of one of its employees over a three-year period from 2015 to 2018, and upon termination of that employee, had failed to pay the employee his accrued annual leave (as charge back of expenses incurred by Active Towing Sydney).
The expenses relate to matters such as parking fines and damage to tow-truck vehicles. The Court awarded the employee compensation of $26,955.52 plus interest of $5,819.16. Penalties were also levied against Mr Williamson personally.
The three failed companies owed a combined total of $1,833,747 to unsecured creditors, including approximately $1,472,006 owed to the ATO.
In disqualifying Mr Williamson, ASIC relied on supplementary reports lodged by Active Towing Sydney’s liquidator, Mr Richard Albarran of Hall Chadwick (NSW) and Ryde & District Smash Repairs’ liquidator, Mr David Ross then of Hall Chadwick (Victoria).
Mr Williamson is disqualified from managing corporations until 4 January 2027 and his co-director, John Vaughan Markham, has also been disqualified from managing corporations.
Mr Williamson has the right to seek a review of ASIC’s decision by the AAT.
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