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Tuesday 24 March 2020

20-071MR Former director disqualified after transferring business and leaving insufficient assets to pay creditors

ASIC has disqualified Mr Damien John Harvie of Ormeau Hills QLD from managing corporations for four years following his involvement in the failure of two companies.

Mr Harvie was the sole director of two companies placed into liquidation:

  • HSS Security Pty Ltd A.C.N. 163 883 761; and
  • Synergy Integration Pty Ltd A.C.N. 600 586 632.

In making an order to disqualify Mr Harvie, ASIC found that he:

  • failed to maintain proper company records;
  • continued to allow Synergy Integration Pty Ltd to trade whilst it was insolvent; and
  • misused the corporate form when he transferred the business to another company, leaving insufficient assets to pay creditors.

At the time of the appointment of the liquidators, the companies had a combined total debt exceeding $1.1 million owed to creditors.

In making the order to disqualify Mr Harvie, ASIC relied on the supplementary reports lodged by Mr Steven Staatz and Mr Nick Combis, liquidators of HSS Security Pty Ltd and Mr Philip Newman and Mr David Quin, liquidators of Synergy Integration Pty Ltd.  The liquidators received funding from the Assetless Administration Fund.

Mr Harvie’s disqualification took effect from 27 February 2020.

Background

Section 206F of the Corporations Act 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, those companies were wound up, and a liquidator provides a report to ASIC about the company’s inability to pay its debts.

ASIC also maintains a public register of banned and disqualified persons that provides information about people who have been:

  • disqualified from involvement in the management of a corporation;
  • disqualified from auditing self-managed superannuation funds (SMSFs); or
  • banned from practising in the financial services of credit industry.

ASIC is a member of the Phoenix Taskforce, which comprises federal, state and territory government agencies who collaborate to combat illegal phoenix activity. The aim of the Phoenix Taskforce is to provide a whole-of-government approach to identify, disrupt and prosecute those who engage in or facilitate illegal phoenix activity.

Suspected phoenix activity can be reported to the Phoenix Taskforce on 1800 060 062 or online at the ATO website.

More information about ASIC action against illegal phoenix activity is available on ASIC’s website.

Last updated: 24/03/2020 10:04