ASIC investigates mystery caravan park resident who owns 20 companies
The corporate regulator has launched an investigation into a how a mystery caravan park resident with no assets became owner of more than 20 companies owing creditors money.
The corporate regulator has launched an investigation into a scheme in which a mystery caravan park resident with no assets became owner of more than 20 companies that went on to be liquidated owing creditors money.
On Thursday, The Australian revealed how multiple companies were transferred to 54-year-old NSW south coast man Jamyson Taylor-Leigh Curthill in transactions organised by his friend, Sydney accountant and insolvency adviser Wayne Fraser.
The Australian Securities & Investments Commission told The Australian it was “aware of the issues raised” but declined to comment on whether it was investigating the case.
However, The Australian understands the regulator is actively investigating the scheme, which has been described as similar to phoenix activity, where a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying its debts, including taxes, creditor payments and employee entitlements.
In a statement, ASIC pointed out that it had previously taken action against pre-insolvency advisers, including a case in 2020 that resulted in adviser Stephen O’Neill being jailed for five years after pleading guilty to dealing in the proceedings of crime.
The conviction came after Mr O’Neill advised a company director to engage in activity that would involve the illegal removal of company assets to prevent creditors from accessing them.
The Australian does not suggest Mr Fraser has been involved in illegal phoenixing.
The move to investigate the caravan park scandal signals a renewed interest by ASIC in tackling phoenix-like operations, following criticism that despite the Morrison government enacting new laws to combat creditor- and tax-dodging schemes, the regulator had failed to use its new powers.
Industry specialists have slammed the corporate regulator and the tax office over their failure to take action against operators of phoenix-like schemes who help business owners escape their debts by transferring ownership to people who have no assets.
A review of the new laws by University of Sydney Business School phoenixing expert Clinton Free, published late last year, concluded that “regulators’ enforcement of illegal phoenix activity has decreased in the years following the 2020 reforms and there has not yet been instances in which the new criminal and civil offences have been litigated or in which ASIC’s recovery powers have been applied”.
“ASIC doesn’t get excited about small amounts,” Professor Free told The Australian.
Several industry experts expressed surprise that Mr Curthill had not already been banned as a director, given he was flagged as the new director of nine separate companies in a meeting with a liquidator more than two years ago, in April 2022.
None of the companies had any assets but they had all been transferred to Mr Curthill, and then all been referred to the liquidator by Maxum Taxation, a company controlled by Mr Fraser.
ASIC should already have been “all over this”, according to Simon Nelson, director of insolvency specialists BPS Reconstruction and Recovery.
“If the liquidator has reported the conduct of the new director as being involved in nine liquidations (in a single day in April 2022) to prevent him from being appointed in the future, I would have thought ASIC should have taken action by now,” he said.
Mr Nelson said ASIC was usually “pretty proactive in regulating people who don’t do the right thing – within their budgetary constraints”.
The Australian Taxation Office, often the largest creditor in insolvencies, should be doing more to claim what it was owed, he said. “I’m often disappointed with their engagement in some insolvencies where you are appointed and they have a big claim or often they are the applicant, yet they don’t get as involved as they should,” Mr Nelson said.
Litigation funder Douglas Whelan, whose company Premier Litigation Funding Management specialises in insolvency recovery, said it was “particularly disappointing that the ATO … rarely works with ASIC or the insolvency practitioner”.
“It would be wonderful to see the ATO take more action because all the money that has been ripped out of these companies that was meant to go to the tax office is tax you and I would otherwise not have to pay,” Mr Whelan said.
The ATO declined to comment on the specific cases revealed by The Australian, citing obligations of confidentiality and privacy under the law, but said it “has a range of targeted strategies to address the growth in collectable debt … This includes a renewed focus on legal recovery actions such as court-imposed liquidation if a debt remains unpaid.
“However, the ATO also needs to balance its position as a creditor and as the administrator of the tax and super systems,” a spokesperson said.
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