ASIC has disqualified Queensland director David Shane Fanning from managing corporations for the maximum period of five years due to his involvement in the failure of four companies.
Mr Fanning was a director or officer of the following companies that failed between 2020 and 2022:
- Kabi Metal Fabrication Pty Ltd ACN 160 074 359
- Ezy Machinery Australia Pty Ltd ACN 164 493 216
- Xtract Engineering and Fabrication Pty Ltd ACN 165 053 985, and
- Ezy Machinery Global Pty Ltd ACN 642 620 219.
Kabi Metal Fabrication provided labour hire to EZ Machinery Australia. Xtract Engineering manufactured and sold machinery and EZ Machinery Australia and EZ Machinery Global sold this machinery to customers.
ASIC found that Mr Fanning:
- failed take all reasonable steps to ensure that EZ Machinery Global and Xtract Engineering kept proper financial records
- failed to exercise due care and diligence to ensure that Ez Machinery Global and Xtract Engineering met their statutory lodgement obligations
- did not understand his obligations as a director, officer and General Manager of companies
- failed to adequately discharge his obligations as a director and officer, and
- misrepresented to ASIC his role in the companies.
The four companies failed owing a total of $6,045,185 to unsecured creditors, including the ATO.
ASIC have granted Mr Fanning permission to manage Hudson David Pty Ltd ACN 139 413 817, trustee of the Fanning Superannuation Fund.
In disqualifying Mr Fanning, ASIC relied on supplementary reports lodged by the liquidators of Kabi Metal Fabrication, Jason Porter of SV Partners, and the liquidator of Xtract Engineering, Steven Gladman of Hall Chadwick. ASIC assisted the liquidators to prepare reports by providing funding from the Assetless Administration Fund.
Mr Fanning is disqualified from managing corporations until 6 July 2031.
Mr Fanning has the right to seek a review of ASIC’s decision by the Administrative Review Tribunal.
Background
Section 206F of the Corporations Act allows ASIC to disqualify a person from managing corporations for a maximum period of 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 each of 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
- practicing in the financial services or credit industry.
