William James McDonald of Clayfield, Queensland, has been disqualified from managing corporations for two years after his involvement in six failed companies.
Mr McDonald was a director of six companies operating in Queensland between 2003 and 2019, namely:
- MCG Group Pty Ltd A.C.N 124 699 823 (MCG Group);
- Wonky Donkey Pty Ltd A.C.N 162 673 707 (Wonky Donkey);
- MCG Quarries Pty Ltd A.C.N 119 739 758 (MCG Quarries);
- Fortrus Resources Pty Ltd A.C.N 145 178 070 (Fortrus Resources);
- B. McDonald (NO.2) Pty Ltd A.C.N 129 526 692 (B. McDonald); and
- MCG Plant Pty Ltd A.C.N 105 306 527 (MCG Plant).
MCG Group, MCG Quarries, MCG Plant and Fortrus Resources were involved in the mining industry, and Wonky Donkey operated a pub in Victoria. B. McDonald never operated a business in its own capacity - but acted as a trustee of a discretionary investment trust.
In making its decision, ASIC found that Mr McDonald:
- Failed to prevent MCG Group and Wonky Donkey from incurring debts when the companies were likely to be insolvent.
- Improperly used his position as a director of Wonky Donkey to:
- cause detriment to the company by enabling another party to sell Wonky Donkey's business and failing to recover the full consideration; and
- gain an advantage for himself or another party by enabling another party to receive the majority of the proceeds of the sale of the company's business.
- Failed to exercise his duties as a director of Wonky Donkey:
- in good faith and in the best interests of Wonky Donkey by allowing another party to sell Wonky Donkey's business and in failing to recover the full proceeds of sale of the business; and
- with due care and diligence by failing to meet the company's statutory lodgment obligations.
The total amount owed to creditors across all six companies is estimated to be more than $250 million, of which approximately $1.9 million is owed to the Australian Taxation Office.
In making the decision to disqualify Mr McDonald, ASIC relied on supplementary reports lodged by the liquidator of MCG Group, Anne Meagher of SV Partners, and the liquidator of Wonky Donkey, Terrence Rose of SV Partners. ASIC assisted both liquidators to prepare supplementary reports by providing funding from the Assetless Administration Fund.
Mr McDonald is disqualified from managing corporations until 24 June 2023.
Background
Section 206F of the Corporations Act gives ASIC the power to disqualify a person from managing corporations for up to five years if, within a seven-year period, the person was an officer of two or more companies that were wound up and the liquidators lodge reports with ASIC about each company's inability to pay its debts or alleging misconduct.
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.
