South Stradbroke Caretaking Services: Probe into alleged ‘dummy directors’ at Couran Cove-linked company

A liquidator is requesting funding for a public probe into a collapsed company linked to Couran Cove amid allegations it may have been run by ‘dummy directors’.

A liquidator is requesting funding for a public probe into a collapsed company linked to troubled Couran Cove Island Resort amid allegations it may have been run by “dummy directors”.

Liquidator Gavin Morton’s bombshell report into South Stradbroke Caretaking Services Pty Ltd alleged its current and former directors did not appear to have “taken an active interest in the company”.

The report further stated South Stradbroke Caretaking Services was reliant on loans from a company called EDG Capital Operations Pty Ltd to meet its expenses.

The sole director of EDG Capital Operations is Simon Napoli.

When asked for his response, Mr Napoli said: “EDG Capital provides funding to many companies and that is a core business of the company.”

There’s no suggestion of any wrongdoing by Mr Napoli.

EDG Capital Operations director Simon Napoli. Picture: Nigel Hallett

Mr Morton’s report also stated that it appeared the company was “insolvent since at least from June 30 2021, if not earlier”.

South Stradbroke Caretaking Services was wound up in June over a $124,000 debt to a water contractor that performed work for Couran Cove between September last year and February this year.

It is among four companies linked to key services and operations at the island resort which have collapsed owing millions of dollars between them.

The money is unlikely to ever be repaid.

Mr Morton, of Morton & Lee Insolvency, was appointed liquidator by order of the Supreme Court of Queensland.

Liquidator Gavin Morton, of Morton & Lee Insolvency

His statutory report into South Stradbroke Caretaking Services was published on the Australian Securities and Investments Commission (ASIC) website.

“There have been suggestions by numerous parties that both the director and former director may be ‘dummy directors’,” the report said.

“The director and former director do not appear to have taken an active interest in the company.

“My investigations are ongoing, and I am in the process of making an application to the ASIC Assetless Administration Fund for funding to hold a public examination to investigate, among other things, who was controlling the company.”

The marina at Couran Cove Island Resort. Picture: Greg Stolz.

William Bayfield Doolen, 77, was registered as a director of the company in February and remained so until it was wound up.

The Bulletin spoke briefly to a man who identified himself as Mr Doolen over the phone.

When asked for his response to the liquidator’s report, he responded: “No, I’m with a customer right now. I can’t talk to anybody at the minute.”

Mr Doolen was then asked when he would be available to respond to the questions, but the line went dead shortly after.

During a follow-up call he said: “I’m not discussing anything with it. Thank you,” before the line went dead.

Previous director Cassandra Elizabeth Gillespie, 36, was a director from when the company was first registered in August 2020 until March 17 this year.

Both the Bulletin and Mr Morton have been unable to reach Ms Gillespie.

The liquidator’s report said his investigation had identified a number of possible alleged offences committed by Mr Doolen.

These included duty to act with care and diligence, duty to act in good faith and for a proper purpose, use of position, obligation to maintain adequate financial records and duty to prevent insolvent trading.

Couran Cove art

The report noted both Mr Doolen and Ms Gillespie stated the failure of the company was because the body corporates associated with Couran Cove “were unable to pay for the caretaking services and essential services”.

But the report added the company had no contact with, and never received any income from the body corporates.

Mr Morton attributed the failure of the business to a number of factors including trading losses, undercapitalisation, poor financial control and poor management of accounts.

Many residents and holidaymakers fled Couran Cove after their power, gas and water were cut in February amid a bitter body corporate dispute.

The sewerage system was shut off in June.

Dozens of residents who remain at the resort have vowed to stay put and live off-the-grid using water tanks, generators, solar panels and gas bottles.