ASIC bans former Provident Capital director
The Australian Securities and Investments Commission (ASIC) has banned Malcolm Philip Bersten from managing corporations and providing financial services for five years, after he breached his duties as a director and failed to comply with financial services laws.
The man from Turramurra in New South Wales was banned after ASIC's investigation found that "his lack of attention and failure to act contributed to Provident Capitals financial difficulties and eventual failure".
The corporate regulator said Bersten "failed to exercise due care and diligence in the management and reporting of the largest loan made by Provident Capital through its fixed term investment portfolio".
Bersten also allowed Provident Capital to make inadequate and misleading statements to ASIC and the trustees of Provident Capital's debenture holders.
"[Bersten] allowed Provident Capital to make a loan to a related company without obtaining adequate security and to buy a debt of $775,000 when he was aware the related company was unlikely to repay the loan," ASIC said.
It also found he allowed Provident Capital to issue a debenture prospectus in December 2010 to raise funds from the public which contained inadequate and misleading statements.
ASIC Commissioner, John Price, said: "ASIC's actions against Mr Bersten and the former directors of Provident Capital should send a clear message that directors must exercise care and diligence in the management of company assets and the manner in which they are applied".
He said directors should ensure representations made to the public were correct, and reflected the true position of the company.
Bersten was an executive director and in-house legal counsel of Provident Capital from 2 July 2007 to 28 January 2012.
ASIC also suspended Provident Capital's Australian financial services licence (AFSL) on 15 October 2012.
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