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ASIC acts against unrelated Sydney directors for improper behaviour and mismanagement over more than a decade.
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Two banned directors leave trail of 21 failed companies, $38m debt
08 September 2022
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11 minute read
ASIC has disqualified two Sydney directors with a total of 21 failed companies between them and combined debts of almost $38 million, including more than $17 million owed to the ATO.
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With nine failed companies owing a total of nearly $30 million, former director Ian David Johnson of Potts Point, Sydney, has been banned by ASIC from managing corporations for one year.
The companies, with Mr Johnson as director between May 2009 and August this year, include seven operating in the construction industry, one in education and training, and one in healthcare and social services assistance.
They owed a combined total of $29,656,729.98 to unsecured creditors, including $15,267,720.40 to the ATO.
The companies were:
- All Trades Queensland Pty Ltd
- Force Corp Pty Ltd
- Dial A Doctor Pty Ltd
- Medical Services Perth Pty Ltd
- Force Towers Pty Ltd
- English & Leeds Pty Ltd
- SA Access Equipment Pty Ltd
- Minipickers Holdings Pty Ltd
- Equipment Rental Investments Pty Ltd
ASIC found that Mr Johnson acted improperly and failed to meet his obligations as director when he failed to:
- Ensure statutory lodgements by All Trades Queensland and Force Corp were made within time to the Australian Taxation Office
- Ensure employee entitlements were paid for Force Corp Pty Ltd
- Prevent All Trades Queensland Pty Ltd and Force Corp Pty Ltd from incurring debts when they were insolvent
In disqualifying Mr Johnson, ASIC relied on supplementary reports lodged by All Trade Queensland’s liquidator, Joanne Dunn of FTI Consulting, and Force Corp’s liquidator, David Lombe of Deloitte. ASIC assisted Ms Dunn and Mr Lombe to prepare their reports by providing funding from the Assetless Administration Fund.
Mr Johnson is disqualified from managing corporations until 23 August 2023 but has the right to seek a review of ASIC’s decision by the AAT.
Also disqualified is Saleh Zreika, also known as Salem Zreika, of Villawood, NSW, from managing corporations for the maximum period of five years over his involvement in the failure of 12 companies.
Between them, the 12 companies owed $8,281,826 to unsecured creditors, including $1,995,858 to the ATO and $3,425,847 to Revenue NSW.
Between May 2011 and May 2021, Mr Zreika was a director of:
- TS Resources Pty Ltd
- Home Retail Solutions Pty Ltd
- PHA Resources Pty Ltd
- Trinity Corporate Services Pty Ltd
- Aiims Group NSW Pty Ltd
- Conway Resources Pty Ltd
- Professional Contracting (NSW) Pty Ltd
- Sun Construction Services Pty Ltd
- Major Investment Group II Pty Ltd
- Plant Hire Australia (NSW) Pty Ltd
- PHA Management Pty Ltd
- PHA Resources (NSW) Pty Ltd
ASIC found that Mr Zreika did not possess the skills to manage a company and should not manage corporations because he:
- Managed 12 corporations in such a way that each failed owing significant amounts, with no ability to pay creditors
- Disregarded statutory lodgement duties by failing to lodge many documents with the ATO from 2017–20
- Avoided paying statutory debts accrued by TS Resources Pty Ltd, Home Retail Solutions Pty Ltd and Trinity Corporate Services Pty Ltd
- Allowed TS Resources to lend $627,030 to related parties for no commercial reason and in an uncommercial manner, with $266,560 of the money loaned yet to be repaid
- Managed TS Resources and Home Retail such that they did not keep proper books; and failed to provide adequate responses when liquidators requested information
In disqualifying Mr Zreika, ASIC relied on supplementary reports lodged by Ian Niccol and Vincent Pirina of Aston Chace Group for TS Resources Pty Ltd and Home Retail Solutions Pty Ltd. ASIC assisted Mr Niccol and Mr Pirina to prepare their reports by providing funding from the Assetless Administration Fund.
Mr Zreika is disqualified from managing corporations until 1 September 2027 but has the right to seek a review of ASIC’s decision by the AAT.
The Corporations Act allows ASIC to disqualify a person from managing corporations for a maximum period of five years if, within a seven-year period, the person was an officer of two or more companies and those companies were wound up and a liquidator provides a report to ASIC about each of the company’s inability to pay its debts.
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