A NSW man has received the maximum five-year ban on managing companies after ASIC found he engaged in phoenix activity in multiple business failures.
According to the Australian Securities and Investments Commission (ASIC), Jason Andrew Hammond of Cameron Park in the NSW Hunter region engaged in a number of improper activities associated with his three limited proprietary businesses: LLM Rivits, Dongrove and “ACN 125 277 250” (formerly known as Newcastle Bridal House).
The regulator found that the three businesses owed creditors a combined $1.4 million, but Mr Hammond engaged in phoenix activity by transferring assets and operations from one company to another, leaving the defunct company with nothing to pay creditors.
ASIC also accused Mr Hammond of a number of other failures as a director, including:
- Not preventing more than one of the companies from trading while insolvent
- Not paying tax
- Not maintaining proper financial records
- Inadequately monitoring company operations and financials
- Continuing to “behave without regard for the law” and neglecting “his professional responsibilities as a director and an accountant”
Mr Hammond’s ban took effect from 11 August this year, meaning he is disqualified from managing a business until 10 August 2023.
The case comes as the federal government unveiled draft legislation aimed at combatting illegal phoenix activity, including restricting the ability of directors to minimise their personal liability for business failures.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.