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ASIC bans former property developer from managing corporations for five years

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ASIC has disqualified Mr Michael David Steele, of Murwillumbah New South Wales, from managing corporations for the maximum period of five years.

Mr Steele was an officer of two corporations, Eastco Developments Pty Ltd ACN 606 330 287 (Eastco) and EA Invest Pty Ltd ACN 611 544 748 (EA Invest).

EA Invest was placed into external administration on 12 February 2018, and Eastco was placed into external administration on 11 April 2018, owing investors more than $4.5 million.

ASIC’s investigation found that Mr Steele:

  • attested in an affidavit that he and another individual managed Eastco despite not being a listed director;
  • failed to lodge documents such as BAS and income tax returns with the Australian Taxation Office;
  • allowed Eastco to enter into 12 loan agreements totalling over $2.1 million in circumstances where it was uncertain whether the company would receive approvals to complete a development project;
  • had no intention of returning the funds received by investors once he became aware that Eastco would not receive the required approvals;
  • allowed EA Invest to enter into 22 loan agreements totalling over $2.4 million and failed to invest money as promised; and
  • transferred investor funds into his personal bank accounts and used investor funds for personal expenses.

In making its decision to disqualify Mr Steele, ASIC relied on supplementary reports lodged by the liquidators of Eastco and EA Invest, namely David Hambleton of Rodgers Reidy and Glenn O’Kearney of GT Advisory and Consulting, respectively. ASIC assisted both liquidators in preparing their supplementary reports by providing funding from the Assetless Administration Fund.

Mr Steele has been disqualified from managing corporations until 22 September 2025.

Background

Section 206F of the Corporations Act gives ASIC the power 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 alleging misconduct.

ASIC maintains a Banned and Disqualified Persons 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 or credit industry.

In November 2018 Mr Steele was charged by ASIC and convicted for failing to provide a Report as to Affairs and company books to the liquidator of EA Invest. In June 2019, Mr Steele was convicted of failing to assist the liquidator of Eastco.

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Regulator Information

Abbreviation: ASIC
Jurisdiction: Australia

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