ASIC has disqualified Allen Bruce Caratti, of Perth, Western Australia, from managing corporations for a period of 4 years, after his involvement in three failed companies.
Mr Caratti was a director of three failed companies between 2005 and 2017:
- ACN 142 745 337 Pty Ltd (ACN 626 936 605) (formerly Mammoth Civil Pty Ltd) ('Mammoth Civil');
- Whitby Land Company Pty Ltd (ACN 115 233 193) ('Whitby'); and
- MNWA Pty Ltd (ACN 101 717 177) ('MNWA').
The three companies operated in Perth, WA, where each of them engaged in land development.
ASIC found there were significant failures of governance and oversight by Mr Caratti in the management of the three companies, in that:
- Mammoth Civil failed to lodge an income tax return with the Australian Taxation Office ('ATO') for the financial year ending 30 June 2015 and failed to maintain proper business records;
- Whitby failed to register for an Australian Business Number or tax file number, to lodge business activity statements between 2011 to 2012 and to lodge income tax returns for the years 2011 to 2013. Whitby also provided the ATO with inconsistent information on land development costs and failed to report to the ATO part of the sales of land in one of the company's land developments; and
- MNWA provided unsupported claims to the ATO for tax deductions for the period 1 July 2009 to 30 June 2012 and failed to maintain proper business records.
During ASIC's consideration of this matter, Mr Caratti provided a signed assurance that he would resign his director and secretary positions of certain companies which did not actually occur, thus he was either willingly or carelessly making false representations to ASIC. ASIC found this supported the disqualification decision.
ASIC also found support for the disqualification decision having regard to a conviction for failing to assist the liquidator in respect of Whitby and for failing to tell the liquidator the location of the business records in respect of MNWA.
In deciding to disqualify Mr Caratti, ASIC relied upon statutory reports lodged by Robert Kirman of McGrathNicol, Perth, WA, who was the Registered Liquidator appointed for each of the three companies. ASIC assisted Mr Kirman to prepare his supplementary report for each of the three companies by providing funding from the Assetless Administration Fund.
On 8 October 2024, Mr Caratti applied to the Administrative Appeals Tribunal (now the Administrative Review Tribunal) for a review of ASIC's disqualification decision, and a stay order in respect of the disqualification decision as well as a stay order on ASIC issuing a Media Release.
On 16 December 2024, the Administrative Review Tribunal refused Mr Caratti's application for a stay order. The substantive review application remains ongoing.
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.
