A NSW man has been banned from managing companies for five years after overseeing nine failed businesses that racked up millions of dollars in debts.
Kurnell resident Peter Kalos received the ban from the Australian Securities and Investments Commission (ASIC), which took effect as of 31 January 2018, for his role in nine proprietary limited construction and management businesses.
These businesses were Always Demolition & Excavation, Arndt Investments, Omikron Industrial Supplies, PKM Group Holdings, Platinum Projects, Ramlaw Holdings, Sylvania Seaside Developments and Worthville.
Interestingly, the ninth business was a management consulting firm by the name of PK Management Consulting Services.
ASIC found Mr Kalos guilty of a number of breaches of duty, including the transfer of corporate assets to the detriment of creditors, failing to pay tax, trading while insolvent and engaging in phoenix activity.
Combined, the nine companies owed creditors close to $8 million.
Under the Corporations Act, ASIC has the power to disqualify anyone from managing companies for up to five years if they are found to have operated two or more failed companies unable to pay debts.
My Business readers have previously expressed their support for the government’s crackdown on phoenix activity.
“Phoenixing your business is the most despicable thing and I think the book should be thrown at people who do it. Doing this – robbing other small business people of fair payment for their goods and services and good faith – is unforgivable,” said one in response to a father and son being struck off as directors.
Others, however, have said that banning is not a severe enough deterrent for would-be phoenix operators.
“If they real[l]y want to stop this activity, then it should have been five years in jail. These petty slap on the wrist judgments are a waste of everyone’s time,” said another.
“The penalty is a joke,” added a third.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.