ASIC bans former Provident Capital MD

The Australian Securities and Investments Commission (ASIC) has banned the former managing director of Provident Capital from managing corporations for five years and providing financial services for seven years.

It comes as ASIC found Michael Roger O'Sullivan failed to fulfil his duties as a director and broke financial services laws while he was the head of the failed debenture issuer and mortgage lender.

O'Sullivan did not carry out due care and diligence in the overseeing and recording of the largest loan made by Provident Capital through its fixed term investment portfolio.

He also helped the firm make misleading statements to ASIC and Australian Executor Trustees, and misused his position for financial gains for himself and a company of which he was previously a director.

He also made Provident issue a debenture prospectus with misleading statements in December 2010 to raise funds from the public.

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The five year ban is the maximum time of disqualification ASIC can bring in under section 206F of the Corporations Act 2001.

Provident Capital went into receivership in July 2012 and into liquidation on October 2012.

ASIC suspended its financial services licence for six months last year in line with paragraph 915B(3)(b) of the Corporations Act, where licences can be suspended upon the licensee's request.

At the time of liquidation over 3000 Provident debenture holders were owed around $130 million.

O'Sullivan can appeal to the Administrative Appeals Tribunal for a review of the ASIC decision.