Directors who violate rules on debts, taxes and accounting face serious consequences.
ASIC has disqualified Jason Andrew Hammond of Cameron Park, NSW, from managing companies for five years as a result of his involvement in three failed companies.
ASIC found that Mr Hammond:
- Improperly used his corporate position by causing assets to be transferred for little or no consideration to the detriment of unsecured creditors
- Failed to prevent some of the companies from trading while possibly insolvent
- Failed to pay tax and ensure that proper financial records were kept
- Failed to exercise his duties as a director with due care and diligence
- Failed to comprehensively monitor company operations and financial position
- Engaged in phoenix activity by transferring the business of an indebted company to a new company, leaving the initial company with no assets to pay creditors while continuing what was essentially the same business using the new company
The total amount of debts owed by the three companies to creditors was almost $1.4 million, according to ASIC.