ASIC has disqualified Alaa El Hassan of Sydney, New South Wales, from managing corporations for 5 years due to his involvement in the failure of seven companies that went into liquidation during 2018 and 2019. Mr Hassan was a director of seven companies which operated across a variety of industries including the hospitality, construction, cleaning and electrical industries:
- AHS Trading Trading Australia Pty Ltd (ACN 153 753 756);
- Rentile Management Services Pty Ltd (ACN 160 321 433);
- MZ Superior Cleaning Pty Ltd (ACN 143 106 441);
- Seacliff Functions Pty Ltd (ACN 145 066 084);
- Unique Cleaning Australia Pty Ltd (ACN 616 277 975);
- M.O. Electromaster Group Pty Ltd (ACN 149 213 329); and
- FF Investments Australia Pty Ltd (ACN 159 748 026).
At the time of ASIC's decision, the seven companies owed a combined total of $3,723,402.16 to unsecured creditors. This included $2,879,671.46 owed to the ATO, $547,346 owed to Revenue NSW and $23,246 was owed to former employees, which included $21,246 of unpaid superannuation.
ASIC found that Mr Hassan acted improperly and failed to meet his obligations as an officer when he:
- Failed to ensure that the companies (excluding Rentile Management Services Pty Ltd) paid their tax debts.
- Failed to maintain books and records to allow for accurate financial statements to be prepared for AHS Trading Trading Pty Ltd and MZ Superior Cleaning Pty Ltd.
- Failed to exercise his powers and discharge his duties as a director of AHS Trading Trading Pty Ltd by failing to participate in the management of the company in circumstances where the company sold its only incoming producing assets and did not receive any proceeds for the sale.
- Was a director of the companies in name only and was appointed to shield the true directors from the personal liability associated with the companies' significant statutory liabilities.
- Failed to ensure that AHS Trading Trading Pty Ltd, MZ Superior Cleaning Pty Ltd and Seacliff Functions Pty Ltd complied with their statutory lodgement obligations with the ATO.
- On 10 December 2019, Mr Hassan was convicted and fined a total of $800 for breaching section 530A of the Corporations Act for failing to deliver all of books and records of Rentile Management Services. On 15 June 2021, Mr Hassan was again convicted and fined a total of $3000 for breaching section 530A of the Corporations Act for continuing to fail to deliver the books and records of Rentile Management Services.
In disqualifying Mr Hassan, ASIC relied on supplementary reports lodged by liquidators Mr David Hurst of Mackay Goodwin, and Mr Daniel Frisken of O'Brien Palmer.
ASIC assisted Mr Hurst and Mr Palmer to prepare their statutory reports by providing funding from the Assetless Administration Fund.
Mr Hassan is disqualified from managing corporations until 14 February 2029.
Mr Hassan 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.
Through enforcement action against selected directors who contravene s206F, ASIC demonstrates that there are appropriate consequences for the mismanagement of small and large companies. ASIC will take targeted action against individual directors to protect the wider public, employees and other businesses against the future mismanagement of companies.
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
- practicing in the financial services or credit industry.
