ASIC has disqualified Mr Kenneth Wen Hsi Lee, of Lurnea, New South Wales, from managing corporations for a period of two years.
Mr Lee was a former director of S.E.T Services Pty Ltd (SET) and Sydney Project Group Pty Ltd (SPG), both failed land-owning companies involved in a property development known as ‘Skypoint Towers’ in Lidcombe, New South Wales.
The total amount of debts owed by the companies was in excess of $7 million.
An ASIC delegate found Mr Lee:
- failed to take reasonable steps to place himself in a position to guide and monitor the management of the companies;
- failed to exercise his powers and discharge his duties as a director of SPG in good faith, in the interests of SPG and for a proper purpose by pursuing an unnecessary appeal by SPG in the New South Wales Land and Environment Court in relation to the Skypoint Towers development;
- failed to take all reasonable steps to secure compliance by SET and SPG with their obligations to keep written financial records that correctly recorded and explained the companies’ transactions, financial position and performance that would enable true and fair financial statements to be prepared; and
- failed to ensure that the companies complied with their statutory duty to lodge Business Activity Statements with the Australian Taxation Office.
Mr Lee’s disqualification took effect on 31 October 2019 and will continue to 30 October 2021.
In making the decision to disqualify Mr Lee, the delegate relied on reports lodged by the liquidators of SET and SPG.
Background
Mr Lee was the sole director of SET and SPG between 26 April 2016 and 16 June 2017. On 22 December 2017, Michael Hogan and Christian Sprowles were appointed as liquidators to both companies following a vote by creditors to wind up the companies.
The sole shareholder of SPG and SET was Salim Mehajer, who was also a director of SPG between the periods 21 February 2012 to 22 April 2013 and 21 January 2014 to 27 October 2015 and of SET between 21 January 2014 and 27 October 2015. On 5 November 2015, Mr Mehajer was disqualified by ASIC for a period of three years arising from his management of other companies, with that decision upheld by the Administrative Appeals Tribunal following an application for review by Mr Mehajer ().
Section 206F of the Corporations Act allows ASIC to disqualify a person from managing corporations for up to five years if, within a seven-year period, the person was an officer of two or more companies that were wound up and the liquidators lodge reports with ASIC about each company’s inability to pay its debts or allege misconduct.
ASIC also maintains a register that provides information about people who have been disqualified from:
- involvement in the management of a corporation,
- auditing self-managed superannuation funds (SMSFs), or
- practicing in the financial services of credit industry.
