ASIC initially issued the ban – which prevents Mr O’Sullivan from managing corporations for five years and from providing financial services for seven years – on 20 February 2015 after finding he had used his position improperly to “gain financial advantages for himself” and the company.
“Provident Capital issued debentures to retail investors through their fixed-term investment portfolio and advanced the debenture funds to third-party borrowers, including property developers, on a first mortgage basis,” the regulator said.
On 2 May 2017, the Administrative Appeals Tribunal (AAT) upheld ASIC’s ruling. However, the tribunal “qualified the five-year disqualification decision by permitting Mr O'Sullivan to remain as a director of three private companies” so long as those companies’ activities relate only to Mr O'Sullivan’s immediate family.
“The behaviour of Mr O’Sullivan has fallen below the standard that is expected and required of a public company director,” the AAT said.
Mr O’Sullivan showed no “genuine contrition” for his behaviour, which “'involved either a subconscious or at times an attempt to camouflage or massage critical information and to even completely prevent that information from being disclosed on a timely basis.”
ASIC commissioner John Price said the regulator “welcomed” the AAT’s decision.
“ASIC is committed to taking action against directors who fail to exercise care and diligence in the management of company assets,” Mr Price said.
“ASIC’s powers to disqualify directors of failed companies and to ban individuals from providing financial services are important preventative measures to safeguard the public interest.”
Mr O’Sullivan has 28 days to appeal the AAT’s decision in the Federal Court.
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