The director of ERB International Pty Limited (the company), Mr Ali Hammoud has been sentenced to a total period of imprisonment of 2 years, with 12 months to serve following the Australian Securities and Investments Commission (ASIC) bringing criminal charges against him for dishonestly breaching his duties as a director and making false statements.
In 2014, ASIC took action against the two liquidators of the company, Pino Fiorentino and William Hamilton and as a result ASIC uncovered Mr Hammoud’s dishonest conduct in:
- using his position as a director to misappropriate more than $2.6 million shortly prior to the company being put into liquidation; and
- making a false statement to obtain a financial advantage following an ASIC investigation into the collapse of the company.
ERA Legal acted for the replacement liquidators of the company who undertook their own investigations into the company. As a result of the appointment of the new liquidators and following their investigations, all creditors of the company were paid in full prior to the liquidation being finalised.
Notwithstanding that all creditors were paid in full and Mr Hammoud entered an early guilt plea, in handing down what appears to be a very harsh sentence, ASIC and the courts appear to have little sympathy for directors of companies who obtain financial advantage by misusing their position.
ASIC reports that in handing down the sentence, Judge Haesler emphasised that company directors hold important positions of trust and need to be aware that they face jail if they breach that trust and act dishonestly.
For more information please contact ERA Legal.