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Directors cop 3-year bans for collapsed companies owing $17m

Regulation

ASIC imposes less-than-maximum disqualifications for two unrelated directors responsible for nine failed companies between them.

By Philip King 10 minute read

Two unrelated directors responsible for a total of nine failed companies that owed a total of almost $17 million to unsecured creditors have been banned from managing corporations for three years each.

ASIC disqualified Jun Toyoda of Potts Point, NSW, over his involvement in the collapse of six food and hospitality companies between October 2018 and April 2021.

The companies, Basic Concept (BasCon), Asrapport Australia, Asrapport Restaurant Systems, Southern Cross 339, About Life Foodservice and Globridge Australia were liquidated owing a combined total of $6,189,299 to unsecured creditors, including approximately $2,213,940 to the ATO.

In addition, Mr Toyoda was involved with NBI Australia, which entered liquidation in October 2018 owing $81,969 to the ATO.

The companies operated across Sydney at Elizabeth Bay, Crows Nest, Cremorne and Chatswood.

ASIC found that Mr Toyoda:

  • Engaged in phoenix activity by selling indebted BasCon to new companies.
  • Gained an advantage and/or caused detriment to NBI when its business was sold to another company without full payment.
  • Failed to repay personal debts to NBI.
  • Failed to comply with statutory ATO lodgement obligations.
  • Failed to prevent BasCon and Asrapport from continuing to trade and incur debts when they appeared to be insolvent or in significant financial distress.

In banning Mr Toyoda, ASIC said it considered his co-operation, admissions and remorse and imposed less than the maximum five years.

In disqualifying Mr Toyoda, ASIC relied on supplementary reports lodged by BasCon’s liquidator, Mr Jason Tang of Cor Cordis (NSW) and Asrapport’s liquidator, Mr Jamieson Louttit of Jamieson Loutit and Associates (NSW).

ASIC also imposed a three-year ban on Mathew Craig Lynch of Langwarrin, Victoria, who was the director of Option One Construction, C.N. 608 209 445 (previously Ultro Construction & Recruitment Sydney) and Ultro Construction & Recruitment Services.

The companies were involved in recruiting and providing labour hire to the building industry in NSW and Mr Lynch was director from April 2015 to January 2022.

The three companies entered liquidation owing a combined total of $10,601,299.37 to unsecured creditors including $730,019.84 to the ATO.

ASIC found that Mr Lynch:

  • Failed to lodge BAS, payroll taxes and Superannuation Guarantee Charge for Option One and Ultro Construction.
  • Failed to pay Workers Compensation premiums for Ultro Construction.
  • Failed to deliver all the books in his possession to the liquidator as soon as practicable after Ultro Constructions was wound up.
  • Failed to invoice Option One Construction correctly for labour hire services or maintain appropriate financial records.
  • Failed to prevent insolvent trading by Option One Construction.

In disqualifying Mr Lynch, ASIC relied on supplementary reports lodged by Option One’s liquidator, Mr Con Kokkinos of Worrells Solvency and Forensic Accountants, and Ultro Construction’s liquidator, Mr Peter Malone of CRS Insolvency Services.

Both Mr Lynch and Mr Toyoda have the right to seek a review of ASIC’s decision by AAT.

ASIC can disqualify someone 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.

 

 

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Philip King

Philip King

AUTHOR

Philip King is editor of Accountants Daily and SMSF Adviser, the leading sources of news, insight, and educational content for professionals in the accounting and SMSF sectors.

Philip joined the titles in March 2022 and brings extensive experience from a variety of roles at The Australian national broadsheet daily, most recently as motoring editor. His background also takes in spells on diverse consumer and trade magazines.

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