The Australian Securities and Investments Commission (ASIC) has reported on two successful convictions against directors for breaching their duties, in that they engaged in illegal phoenix activities.
The reports are in two media releases, both published on 19 December 2017. Copies of the media releases appear below. But unfortunately, the media releases do not report on what, if anything, happened in relation to the assets of the stripped companies. If the only consequences of the phoenix activities were fines and, in one case, disqualification, there has been little in the way of deterrence.
As can be seen, one director was convicted and fined $5,000, and automatically disqualified from managing corporations for five years. His company (Brimarco) had all its funds – $34,800 – taken and transfered to a related company, leaving behind debts of $2 million. The release does not say whether the $34,800, or anything at all, was recovered.
The other director was discharged without conviction upon entering into recognisance in the sum of $2,000 on condition that she would be of good behaviour for two years. She sold the assets of her company (Greenlay Enterprises) to a related entity for $20,000, which appears to have been less than their market value. To make matters worse, the related entity did not actually pay the $20,000. The release does not say whether the assets, or an amount equal to their worth, or anything at all, was recovered.