Fifteen years after a director’s first misconduct, and seven years after his companies went into liquidation, ASIC has reported by media release its achievement of disqualifying the director from managing corporations.
The misconduct included a failure to lodge a 2024-2025 income tax return; the failure to register for an ABN or tax file number, to lodge BAS between 2011 to 2012 and to lodge income tax returns for the years 2011 to 2013; and the provision of unsupported claims to the ATO for tax deductions for the period 2009 to 2012.
ASIC’s action was taken under section 206F of the Corporations Act. The former director of three failed ‘land development’ companies was a Mr Allen Bruce Caratti, of Perth, WA, who has been disqualified from managing corporations for 4 years. The three companies were:
- ACN 142 745 337 Pty Ltd (ACN 626 936 605) (formerly Mammoth Civil Pty Ltd),
- Whitby Land Company Pty Ltd (ACN 115 233 193), and
- MNWA Pty Ltd (ACN 101 717 177). See Zafra Legal Pty Ltd v Harris [2018] FCA 908.
ASIC found there were significant failures of governance and oversight by Mr Caratti in the management of the three companies, explained in ASIC’s media release. 24-291MR Perth property developer disqualified from managing corporations for four years | ASIC
In deciding to disqualify Mr Caratti, ASIC relied inter alia upon statutory reports lodged by the liquidators of the three companies. Funding was provided by the Assetless Administration Fund.
ASIC advises there are ongoing proceedings in the Administrative Review Tribunal for a review of ASIC’s disqualification decision, and for a stay, as well as a stay order on ASIC issuing a media release.
On 16 December 2024, the ART refused Mr Caratti’s application for a stay. The substantive review application remains ongoing.
Comment
According to ASIC, this director’s tax misconduct went back to 2009, and included a failure to lodge income tax returns going back to 2011, failure to register for an ABN or tax file number, and to lodge BAS; and included the making of unsupported claims to the ATO for tax deductions for the period 2009 to 2012. His corporate misconduct involved failure to maintain proper business records.
It seems that not until his companies went into liquidation in 2017 were these matters investigated. He was then convicted for failing to assist the liquidator of Whitby and for failing to tell the liquidator of MNWA the location of the company’s business records.
Even then, not until seven years later, was he disqualified by ASIC. What action the ATO took, if any, is not stated.
A regulator would have to have a certain front to issue a media release reporting this, impliedly, as an achievement.
