ASIC cracks down on director misconduct

During the period from Jan, 1 to March 31, ASIC disqualified four directors due to their mismanagement of small proprietary companies.

The decision follows the collapse of multiple companies which failed to pay creditors, including the Australian Taxation Office (ATO), employees, and other small business creditors.

Details of the disqualifications

ASIC has enforced strict penalties on four directors for significant mismanagement issues that led to the financial downfall of several companies. Below are the details of each director’s disqualification:

• Rukshan Wickramanayake: Disqualified for one year for poor management that resulted in three companies owing $1,487,009.18 to unsecured creditors. ASIC disqualified Wickramanayake until Feb. 5, 2025.
• Shane Dunstan: Banned for two years following the failure of four companies, which owed $4,885,034 to more than 50 unsecured creditors. ASIC disqualified Dunstan until Feb. 11, 2026.
• Alaa Al Hassan: Received a maximum disqualification of five years for the failure of seven companies, accumulating debts of $3,723,402.16. ASIC disqualified Hassan until Feb. 14, 2029.
• Dane Stojic: Prohibited from managing corporations for four years due to the collapse of eight companies owing $33,357,590.28. ASIC disqualified Stojic until Feb. 26, 2028.

Some disqualified directors were involved in illegal phoenix activity and made non-commercial payments to related parties, severely affecting the financial health of their companies. This mismanagement provided these directors an unfair competitive advantage by not fulfilling financial obligations.

ASIC’s actions were supported by detailed reports from liquidators, funded by the Assetless Administration Fund. This fund assists in investigating insolvent companies that lack sufficient assets to cover the costs of their administration.

ASIC actions and legal framework

Under Section 206F of the Corporations Act 2001, ASIC has the authority to disqualify individuals from managing corporations if they have been involved in two or more company failures within a seven-year period. Directors affected by these decisions have the right to seek a review by the Administrative Appeals Tribunal.

ASIC said its stringent enforcement measures are designed to protect the public, employees, and the business community from the adverse effects of corporate mismanagement. By holding directors accountable, ASIC aims to maintain a fair and competitive business environment.

For other recent ASIC news, read about the permanent banning of NSW financial adviser Adele Baaini and the Federal Court ruling on Macquarie Bank over adviser fraud case.

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