ASIC powers to disqualify directors withstands test
Recent Federal Court decisions have reasserted the powers of the Australian Securities and Investments Commission (ASIC) to disqualify company directors who have failed to fulfil their responsibilities.
The Full Court of the Federal Court of Australia this week dismissed an appeal initiated by Brian Malcolm Culley, who challenged ASIC’s decision to disqualify him from managing corporations for two years.
Culley was disqualified due to his involvement in four failed companies (Oriental Experience, Construction Resources, BMC Special Projects and BM Culley & Associates) and failure to fulfil his duties by allowing the companies to accrue significant statutory debts and to trade while insolvent.
He unsuccessfully made appeals to the Administrative Appeals Tribunal, the Federal Court and finally the Full Court of the Federal Court.
ASIC stated that the Full Court’s dismissal of the appeal is significant because it reaffirms ASIC’s power to disqualify directors within a “reasonable time”.
ASIC stated that the recent decisions serve to protect future creditors, investors and employees who may otherwise be involved with a director who has a history of being involved in failed companies.
AUTHOR
Caroline Munro
Recommended for you
Sequoia Financial Group has announced it is selling off its Informed Investor subsidiary which it acquired in April 2022.
Wealth Data has examined which advice business model has seen the most growth since the start of the year including those that offer holistic advice.
Research conducted by Elixir Consulting and Lonsec has quantified the efficiency gains of using managed accounts in financial advice practices in hours per week saved.
With only one-quarter of advice practices actively seeking feedback from clients, the Financial Advice Association Australia has emphasised why this is a critical tool for client retention.
