The companies regulator has slapped a 3.5-year ban from managing companies on a former director, after determining he had engaged in phoenix activity that left combined debts of more than $1.2 million.
ASIC said in a statement that it had issued Victorian man Abdoul Rahim Fatrouni the disqualification for three years and six months, commencing on 8 May 2019, after a review of liquidator reports.
It said that liquidators had been appointed to three companies under Mr Fatrouni’s directorship: ARP Plumbing Pty Ltd (ACN 147 799 531), ARP Roofing Pty Ltd (ACN 161 329 086) and DIY Roofing Australia Pty Ltd (ACN 610 479 082).
They went into liquidation with combined debts recorded at more than $1.2 million.
According to ASIC, its review of the liquidator reports found a number of issues, including:
- Misusing the corporate form by transferring the business of one indebted company and leaving insufficient assets with which to pay creditors, and did so “whilst continuing what was essentially the same business”.
- Failing in his duties as a director by not providing statutory lodgements for either ARP Roofing or DIY Roofing for more than five years.
- Not maintaining adequate financial records for either ARP Roofing or DIY Roofing.
The latter, ASIC added, meant that over three years’ worth of transactions — at more than $2.5 million — at ARP Roofing was unable to be substantiated.
Mr Fatrouni’s ban will end on 8 November 2022.
ASIC has the power under the Corporations Act to disqualify any person from managing companies for up to five years if they were an officer of two or more companies that were wound up and unable to meet their liabilities to creditors.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
- ‘Don’t assume how employees will react to redundancy’
By Simon Rountree
- Customers behaving badly: ‘My time is worth more than yours’
By Adam Zuchetti
- What businesses can learn from Sir Roger Bannister
By Adam Zuchetti