ASIC has disqualified former director Roxanne Cornell of Kurunjang, Victoria, from managing corporations for the maximum period of five years due to her involvement in the failure of three companies.
Between November 2015 and February 2020, Ms Cornell acted as the director of three companies in the construction industry:
- Coconut Post Tensioning Pty Ltd (ACN 618 427 482) (Coconut Post Tensioning);
- Coconut Group Pty Ltd (ACN 609 136 469) (Coconut Group); and
- Petrox Nominees Pty Ltd (ACN 622 608 459).
Coconut Post Tensioning Pty Ltd provided concrete construction services, while Coconut Group operated a steel reinforcement and fabrication company.
ASIC found that Ms Cornell acted improperly and failed to meet her obligations as director when she:
- engaged in phoenix activity by continuing to transfer and operate the business in new entities to sustain a loss-making business and to avoid paying creditors;
- authorised the purchase of Coconut Group, which appeared to be unprofitable, by Coconut Post Tensioning;
- made payments to herself and third parties for an improper purpose for the benefit of her and the third parties, and to the detriment of Coconut Post Tensioning and Coconut Group;
- engaged in conduct that resulted in hindering or obstructing the liquidators of Coconut Post Tensioning to obtain the books of the Company;
- failed to respond to requests by the liquidator seeking information regarding Coconut Post Tensioning; and
- failed to prevent Coconut Post Tensioning and Coconut Group from trading whilst insolvent.
At the time of ASIC's decision, the three companies owed a combined total of $6,133,017 to creditors, including $2,682,204 owing to the Australian Taxation Office.
In disqualifying Ms Cornell, ASIC relied on supplementary reports lodged by the liquidator of Coconut Post Tensioning Pty Ltd and the liquidator of Coconut Group Pty Ltd, Blair Pleash of Hall Chadwick. The liquidator of Coconut Post Tensioning Pty Ltd was assisted to prepare his reports after ASIC approved funding from the Assetless Administration Fund
Ms Cornell is disqualified from managing corporations until 24 February 2028.
Ms Cornell has the right to seek a review of ASIC's decision by the Administrative Appeals Tribunal.
Background
Section 206F of 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 that provides information about people who have been disqualified from:
- involvement in the management of a corporation;
- auditing self-managed superannuation funds (SMSFs); or
- practising in the financial services or credit industry.
More information about ASIC's work in combatting illegal phoenix activity can be found here.
ASIC is also a member of the Phoenix Taskforce, which comprises federal, state and territory government agencies who collaborate to combat illegal phoenix activity. The aim of the Phoenix Taskforce is to provide a whole-of-government approach to identify, disrupt and prosecute those who engage in or facilitate illegal phoenix activity.
Suspected phoenix activity can be reported to ASIC or the ATO by calling 1800 060 062, online
