Director cops 1.5-year ban for failed companies owing $9.5m
Four businesses in the food services sector collapsed at the tail end of the pandemic.
ASIC has disqualified a former food services industry director for one and a half years for his involvement in four companies that collapsed owing more than $9.5 million.
The regulators said Simon Cauchi of Albury, NSW, was the director of four companies between September 2015 and October 2021: Fresh Food Wholesale, Fresh Start Equity, Oh! That’s Good! Food Group and Life Pack.
Fresh Food Wholesale operated in the wholesale trade industry, supplying pre-packed meals to major retail outlets. In July 2019, it bought Fresh Start Equity, which cooked and sold ready-to-eat meals to retailers.
ASIC found that Mr Cauchi acted improperly as a director because:
- He failed to ensure Fresh Food Wholesale and Fresh Start Equity complied with tax obligations.
- He improperly used his position to allow Fresh Food Wholesale to acquire the failing business of Fresh Start Equity, which caused detriment to Fresh Food Wholesale.
- He improperly used his position at Fresh Start Equity to transfer funds totalling $297,406.50 in repayments to Fresh Food Wholesale, which caused detriment to Fresh Start Equity.
- He allowed Fresh Start Equity Pty Ltd to trade while insolvent.
The four companies owed a combined total of $9,575,616 to unsecured creditors, including $529,831 owing to the ATO.
In disqualifying the former director, ASIC took into account Mr Cauchi’s bankruptcy which commenced on 20 October 2021 and relied on supplementary reports lodged by the liquidators of Fresh Food Wholesale and Fresh Start Equity, Adam Shepard of Setter Shepard and Steven Staatz of Vincents.
ASIC assisted Mr Shepard and Mr Staatz in preparing their reports by providing funding from the Assetless Administration Fund.
Mr Cauchi is disqualified from managing corporations until 8 May 2025.
He has the right to seek a review of the decision by the AAT.
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