ASIC has banned Mr Michael Roger Oâ€™Sullivan of Sydney from managing corporations for five years and from providing financial services for seven years. The ban follows an ASIC investigation which found Mr Oâ€™Sullivan breached his duties as a director and failed to comply with financial services laws.
Mr Oâ€™Sullivan was the managing director of Provident Capital Limited (Provident Capital) from 25 May 1998 to 28 January 2014. Provident Capital went into receivership on 3 July 2012 and into liquidation on 24 October 2012.
ASIC suspended Provident Capitalâ€™s Australian financial services licence on 15 October 2012.
ASICâ€™s investigation found Mr Oâ€™Sullivan
â€¢ failed to exercise due care and diligence in the management and recording of the largest loan made by Provident Capital through its Fixed Term Investment Portfolio
â€¢ caused Provident Capital to make misleading statements to ASIC and Australian Executor Trustees Limited
â€¢ caused Provident Capital to issue a Debenture Prospectus in December 2010 to raise funds from the public which contained misleading statements, and
â€¢ used his position improperly to gain financial advantages for himself and for a company of which he was formerly a director.
ASIC Commissioner John Price said, â€˜Directors have a responsibility to ensure that statements made to investors are true and reliable. Failing to meet this simple obligation undermines confidence and trust in the corporate and financial services communities.â€™
â€˜Managing companies and providing financial services requires compliance with important obligations. ASIC will remove those who fail to meet these obligations,â€™ Mr Price said.
Mr Oâ€™Sullivan has the right to appeal to the Administrative Appeals Tribunal for a review of ASICâ€™s decision.
ASICâ€™s investigation is continuing.
Discuss the legal issues raised in the above media release. Refer to relevant legislation and/or case law.