ASIC has banned Steven Andrew Soong from managing corporations for three and a half years after liquidators identified a total of $1,203,386.87 in tax liabilities.
His banning follows the appointment of liquidators to three companies he managed, including Kalnosa Pty Ltd, Linsari Pty Ltd, and Larsay Pty Ltd.
ASIC expressed concerned that Mr Soong had failed to discharge his duties as a director by using tax debts that were collected on labour hire costs to continue trading the companies instead of remitting the debt to the ATO, following shared information by members of the Phoenix Taskforce and liquidators.
Mr Soong’s ban took effect from 7 September 2017 under Section 206F of the Corporations Act which allows ASIC 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, and those companies were wound up and a liquidator provides a report to ASIC about the company’s inability to pay its debts.
“The Phoenix Taskforce brings Australia's key regulatory and enforcement agencies [together] to share information and identify directors who use companies to benefit themselves at the expense of creditors,” said ASIC commissioner John Price.
“Failing to remit company tax has detrimental consequences and adversely affects Australia's revenue base.
“It also gives directors an unfair advantage when competing for work with businesses that play by the rules.”
As part of its focus on illegal phoenixing activity, the government today announced a package of reforms including the introduction of a Director Identification Number (DIN) and a range of other measures to both deter and penalise phoenix activity.
The DIN will identify directors with a unique number and interface with other government agencies and databases to allow regulators to map the relationships between individuals and entities and individuals and other people.
Illegal phoenixing activity has been estimated to cost the economy up to $3.2 billion each year.
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.