25. July 2011 10:09
Former Firepower group chairman Timothy Francis Johnston and former financial adviser Quentin Ward have been banned from managing companies for a combined total of 26 years, following an application by ASIC.
The bannings were handed down by the Honourable Justice Gilmour in the Federal Court in Perth last week.
Mr Johnston has been disqualified from managing a corporation for 20 years while Mr Ward has been disqualified for 6 years.
Mr Johnston and Mr Ward were also ordered to pay ASIC’s costs.
ASIC Chairman Greg Medcraft welcomed the court’s decision and endorsed the statement by Justice Gilmour that Mr Johnston’s conduct ‘is the kind of conduct which diminishes investor and public confidence in commercial markets’.
Mr Medcraft said the case highlighted the importance of investors having all the information they need to reasonably make an informed decision about a company.
‘Where this does not occur as a result of the failings of gatekeepers like directors and advisers then ASIC will not hesitate to act,’ Mr Medcraft said.
‘We will continue to hold gatekeepers accountable – to ensure investors are confident and informed.’
ASIC’s application for the disqualification order, which was heard last month, followed proceedings ASIC brought against various parties associated with Firepower Holdings Group Ltd (Firepower BVI), a company registered in the British Virgin Islands.
The proceedings related to offers for the sale of shares and the distribution of application forms for offers for the sale of shares in Firepower BVI to Australian investors between September 2005 and June 2006 which were in breach of section 727(1) of the Corporations Act. No prospectus or disclosure document was lodged with ASIC and provided to investors.
Mr Johnston was an officer of two companies associated with Firepower BVI, Green Triton Ltd (Green Triton) and Firepower Investments Pty Ltd (Firepower Investments) at the time of the share offers. Mr Ward was a former financial adviser and the sole director of Axis International Pty Ltd (Axis).
On 8 February 2011 the Federal Court declared that both Mr Ward and Axis on a number of occasions contravened section 727(1) of the Corporations Act by distributing application forms for an offer for the sale of shares in Firepower BVI.
The Federal Court also found that each of Green Triton and Firepower Investments contravened s 727(1) of the Corporations Act on a number of occasions in respect of the making of offers for the sale of shares in Firepower BVI.
On the basis of these findings ASIC sought disqualification orders against Mr Ward and Mr Johnston pursuant to s 206E of the Corporations Act.