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The corporate regulator has banned a director from managing companies for a maximum of five years following his possible involvement in illegal phoenix activity.
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Phoenix crackdown sees director banned
07 September 2016
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8 minute read
In a public statement released yesterday, ASIC announced that Mark Frederic Byers has been banned from managing companies for up to five years for his conduct in the management of four failed companies.
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ASIC said the ban follows the appointment of liquidators to four fashion apparel companies he managed: Mentmore Pty Ltd, 095 987 214 Pty Limited (formerly known as Bleach Pty Limited), 135 580 013 Pty Limited (formerly known as Ksubi Copyright Pty Ltd) and 140 672 797 Pty Limited (formerly known as Ksubi Pty Limited).
As a result of information contained in reports provided by the liquidators of the failed companies, ASIC said it had concerns that Mr Byers had “failed to prevent insolvent trading by two of the companies and failed to ensure they paid their taxes”.
The corporate regulator was also concerned he had failed to discharge his duties as a director and “had engaged in illegal ‘phoenix activity’, an activity which involves transferring the assets of an indebted company into a new company, while leaving the initial company with insufficient assets to pay creditors”.
ASIC commissioner Greg Tanzer said ASIC will ensure that directors who are involved in illegal phoenix activity and fail to appropriately discharge their duties will be removed from the management of companies.
ASIC noted that Mr Byers has the right to seek a review of ASIC's decision by the Administrative Appeals Tribunal.
Phoenix activity has been a target of the regulators, including the ATO, for some months now. In early August, accountants were reminded of the important role they can play in helping identify “clusters of risk”.
Speaking to AccountantsDaily at the time, ATO assistant commissioner Scott Parkinson said the ATO wants to increase the information it has on the marketplace to target this type of activity, and said the private sector is a vital part of this.
“We’ve got very robust sources of data in phoenix that not only come from information that the ATO has [but] also from partner agencies from the private sector ... the more information we have from the private sector on phoenix activity, the more we can actually work out where our clusters of risk are,” said Mr Parkinson.
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