The director of a now liquidated company that owed the tax office more than $230,000 will face court on 13 charges relating to alleged phoenix activity.
ASIC has accused Queensland man Allan Ronald Saunders, who was the sole director of Metropolitan Design, of redirecting a number of debtor payments owed to the business into his personal bank account.
These transactions allegedly took place in the five months prior to the business collapsing in September 2015.
ASIC said these transactions amounted to phoenix activity, as they had the effect of denying the ATO – the company’s sole creditor – funds to the tune of $235,626.
Mr Saunders reportedly did not enter a plea when he faced Sandgate Magistrates Court with 13 counts of breaching the Corporations Act. The case has been adjourned to 19 October.
Phoenix activity is a major target of the federal government and business regulators at present.
ASIC commissioner John Price recently labelled the issue “a serious problem in Australia”, and pointed to a PwC report suggesting it costs the national economy “between $2.85 billion and $5.13 billion” – the bulk of which is shouldered by businesses.
It is also the primary reason for the government committing to introduce the new Director Identification Numbers (DINs).
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.