ASIC disqualifies director from managing companies for engaging in illegal phoenix activity

Pauline Jennifer Rogers of Sydney, NSW has been disqualified from managing companies for four years.

Ms Rogers was disqualified for her role in the failure of six companies:

  • ACN 099 510 915 Pty Ltd (previously known as TCC Recruitment Pty Ltd);
  • ACN 135 237 633 Pty Ltd (previously known as The Company Connection Pty Ltd);
  • Product Franchising Australia Pty Ltd ACN 153 801 293 (previously known as The Company Connection (NSW) Pty Ltd);
  • Goomboorian No 2 Pty Ltd ACN 162 136 272 (previously known as The Company Connection (Aust.) Pty Ltd);
  • Latvian Traveller Exchange (NSW) Pty Ltd ACN 169 765 128 (previously known as The Company Connection (Australia) Pty Ltd); and
  • ACN 165 532 963 Pty Ltd (previously known as Black Betty Hospitality Group Pty Ltd).

The companies were involved in recruitment services between 2002 and 2017.

ASIC found that Ms Rogers

  • improperly used her position as a director when she transferred the business or assets of indebted companies, namely TCC Recruitment Pty Ltd, The Company Connection Pty Ltd, Product Franchising Australia Pty Ltd, Goombooarian No 2 Pty Ltd and Latvian Traveller Exchange (NSW) Pty Ltd to other companies. This is commonly known as illegal phoenix activity;
  • failed to act with a degree of care and diligence as a director by causing company funds to be diverted from Goomboorian No 2 Pty Ltd to an account not controlled by the company; and
  • allowed Product Franchising Australia Pty Ltd and Black Betty Hospitality Group Pty Ltd to continue to trade and incur debts while insolvent.

The six failed companies owed unsecured creditors a total of $2,846,336, including $1,336,538 owed to the Australian Taxation Office.

On 19 May 2009, Christopher Damien Darin of Worrells Solvency & Forensic Accountants was appointed the liquidator of TCC Recruitment Pty Ltd; on 4 January 2012 Mr Darin was appointed the liquidator of The Company Connection Pty Ltd; on 4 February 2013, Christopher John Palmer of O’Brien Palmer was appointed the liquidator of Product Franchising Australia Pty Ltd; on 13 May 2014, Steven Nicols of Nicols and Brien was appointed the liquidator of Goomboorian No 2 Pty Ltd; on 9 November 2015, Domenico Alessandro Calabretta of Mackay Goodwin was appointed the liquidator of Latvian Traveller Exchange (NSW) Pty Ltd and on 29 March 2017, Brent Kijurina and Richard Albarran of Hall Chadwick were appointed liquidators of Black Betty Hospitality Group Pty Ltd.

In deciding to disqualify Ms Rogers, ASIC relied on reports lodged by the liquidators of the six failed companies. ASIC assisted the liquidator of Product Franchising Pty Ltd to prepare a supplementary report by providing funding from the Assetless Administration Fund.

Ms Rogers is disqualified from managing corporations until 9 May 2025. Ms Rogers has been granted permission to manage an unrelated company that acts as a trustee company of her self-managed superannuation fund.

Background

Section 206F of the Corporations Act gives ASIC the power to disqualify a person from managing corporations for a maximum period 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 the company’s inability to pay its debts.

ASIC also maintains a banned and disqualified persons register that provides information about people who have been disqualified from:

  • involvement in the management of a corporation;
  • auditing self-managed superannuation funds (SMSFs); or
  • practising in the financial services or credit industry.

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