ASIC bans 2 directors over string of failed companies owing $9m
The decision to disqualify the property developers comes after the watchdog banned their associate in November.
ASIC has banned two ACT property developers from managing companies for two years over their role in the failure of several companies owing over $9 million, including $3 million to the ATO.
Jamie Charles Farrelly and Gary James Kelly have been disqualified until October 2025 for failing to manage three companies in a property development group “to the standard expected of company directors”, ASIC said.
These included Be Athletic Canberra, ACN 601 334 749 (formerly TPG) and 3 Property Group 13. Mr Kelly was also a director of Lifestyle Homes Accounts.
It comes after the regulator banned their associate, Paul Kenneth Nimal Hamilton, in November.
ASIC said six failures occurred between January 2019 and August 2021 which resulted in the companies owing a total of $9,435,642 to unsecured creditors, including $3,084,593 to the ATO and $19,652 to the ACT Office of Revenue.
It said Mr Farrelly had allowed TPG to lend $7,437,710 to related entities without documenting the terms of the loans and resigned as a director of TPG before ensuring the loans were repaid. Additionally, he failed to adequately monitor 3PG13’s financial affairs, trading while insolvent and deferred paying tax to maintain cash flow.
Mr Kelly also failed to lodge activity statements and payment summaries with the ATO, monitor the affairs of Lifestyle Homes and 3PG13, and traded while insolvent. He also deferred tax payments to maintain cash flow.
As the companies managed by Mr Farrelly and Mr Kelly took on debt, the two directors jumped ship to protect their credit ratings and manage other companies in the group, ASIC said.
This breached section 206F of the Corporations Act by causing harm to Mr Hamilton’s credit rating and exposing him to disqualification.
ASIC found Mr Hamilton breached the same section in November after agreeing to replace Mr Farrelly and Mr Kelly as the directors of five companies in the group.
At the time of ASIC’s decision in November, the companies owed $11,867,702 to unsecured creditors, including $5,455,596 to the ATO and $19,652 to the ACT Office of Revenue.
ASIC has also said five more companies within the group have entered liquidation since it decided to disqualify Mr Kelly and Mr Farrelly in October last year. These included KFT Group, Stormer Building Group No 2, Stormer Building Group, 3 Property Group 4 and Lifestyle Homes (ACT) No 1.
ASIC relied on supplementary reports lodged by liquidator Stephen Hundy of Worrells Solvency and Forensic Accountants in disqualifying the three directors.
Mr Farrelly and Mr Kelly have sought a review of its decision by the Administrative Appeals Tribunal, it said.
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