ASIC bans director behind $50m Magnolia Group collapse
The bankrupt, who is under travel restrictions, cops a five-year disqualification from managing companies.
ASIC has disqualified a former Magnolia Capital Group director from managing corporations for five years and banned him from financial services or credit activities for 10 years after the company collapsed owing up to an estimated $50 million.
Mitchell Atkins of Erina, NSW, was a director of the Magnolia Capital Group of companies which operated from 2018 until it collapsed last year.
Businesses in the group provided financial advice and services in relation to secured lending transactions and share investment, and counted some of the nation’s richest families as clients.
Mr Atkins was a director of all the companies in the group, including 13 that were subject to a liquidator’s report which found they were unable to pay their unsecured creditors more than 50c in the dollar.
The liquidators reported a deficiency to creditors of $40-50 million and in March this year Mr Atkins was declared bankrupt.
In June, ASIC obtained a court order preventing Mr Atkins from leaving Australia and requiring him to surrender his passport and any airline tickets.
The orders were sought as part of ASIC’s investigation which has since found that Mr Atkins:
- Put investor funds at risk, created false documents, co-mingled investor funds and displayed a lack of competence, professionalism and financial management.
- Is not a fit and proper person to provide financial services after he dealt in financial products without authorisation, made misleading and deceptive representations to investors, and dishonestly retained investor funds.
- Is not a fit and proper person to engage in credit activities, including because he failed to undertake training, deal with investor complaints and to respond to requests from Guildfords.
Mr Atkins has the right to apply to the AAT for a review of ASIC's decisions.
ASIC’s investigation into the affairs of the Magnolia Capital Group continues.
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