ASIC has disqualified Charles Montgomery Clarke, of Glen Iris, Victoria, from managing companies for the maximum period of five years.

Mr. Clarke is a former director of five failed companies:

• CMTC Pty Ltd A.C.N. 607 395 004;
• CCSLS Services (VIC) Pty Ltd A.C.N. 600 600 388;
• CC Specialized Landscape Services Pty. Ltd. A.C.N. 103 968 467;
• CCSLS Holdings Pty Ltd A.C.N. 152 557 223; and
• A.C.N. 144 899 007 Pty Ltd A.C.N 144 899 007

ASIC found Mr. Clarke:

• failed to prevent one of the companies from trading while possibly insolvent;
• failed to pay tax and ensure that proper financial records were kept;
• failed to exercise his duties as a director;
• failed to comprehensively monitor company operations and financial position; and
• engaged in phoenix activity by transferring the business of an indebted company to a new company leaving the initial company with no assets to pay creditors.

In making its decision, ASIC relied on reports that were lodged by liquidators of the failed companies. ASIC provided liquidators of CMTC and CCSLS Services with funding from the Assetless Administration Fund to prepare supplementary reports used to disqualify Mr. Clarke.

The total amount of debts owed by the five companies to creditors was approximately $3.5 million. 

Mr Clarke's disqualification took effect from 7 September 2018 and extends to 6 September 2023.

Background

Section 206F of the Corporations Act allows ASIC to disqualify a person from managing corporations for up to five years if, within a seven-year period, the person was an officer of two or more companies, and those companies were wound up and a liquidator provides a report to ASIC about the company’s inability to pay its debts.

ASIC also maintains a 'Banned and Disqualified Persons' register that provides information about people who have been disqualified from: 

• involvement in the management of a corporation; 
• auditing self-managed superannuation funds (SMSFs); or
• practising in the financial services of credit industry.

ASIC is a member of the Phoenix Taskforce, which comprises federal, state and territory government agencies who collaborate to combat illegal phoenix activity. The aim of the Phoenix Taskforce is to provide a whole-of-government approach to identify, disrupt and prosecute those who engage in or facilitate illegal phoenix activity.

Suspected phoenix activity can be reported to the Phoenix Taskforce on 1800 060 062 or online at the ATO website.