Liquidated Rocky accountant shadow director reported to ASIC
Liquidated Rockhampton company Taurus Accounting may have been operating while insolvent and the shadow director has been reported to the Australian Securities and Investments Commission for investigation over an alleged breach, a newly filed statutory report has revealed.
The liquidator report filed this month states Kevin Harker, the father of the current director Hamish Harker, may have acted as a de facto or shadow director.
It also alleged Kevin may have organised the transfer of clients after the liquidator was appointed, without the liquidator’s knowledge or approval.
Kevin Harker was sentenced to two years jail earlier this year for fraudulently claiming more than $50,000 in fake GST refunds.
He was ordered to serve two months jail and as of March 22, he was incarcerated at Woodford Correctional Centre.
Kevin was previously director of Taurus Accounting before his son was appointed director in January 2020.
The Rockhampton-based company ceased trading on December 18, 2020 and liquidator Nigel Markey of Pilot Partners was appointed to the company on December 21.
Taurus Accounting operated an accounting business from a Cambridge St address in The Range.
The latest liquidator’s report was sent to creditors on March 19.
The liquidator’s report alleges Kevin Harker, the former director, may have acted as a de facto or shadow director as he acted in the position of director and ‘managed the day to day business of the company including employees, clients and quality control’.
The report also states existing clients of Taurus Accounting were possibly advised by Kevin Harker prior to the liquidation to go to the accounting firm which bought the client list.
Kevin Harker “may have also used information obtained from his position to organise or facilitate the transfer of clients post-appointment without the liquidators knowledge and approval,” the report states.
“The client list is a major asset of the company and the action caused detriment to the company and its creditors by impeding the sale and reducing potential offers that could have been received by other parties who were already a large number of the company clients had moved to the purchaser.
“In my opinion Mr K Harker may have breached his director’s duties in accordance with the Act for allegedly facilitating the transfer of clients.”
This is a breach of director duties and the liquidator has reported this alleged breach to ASIC.
The report also alleges the company may have traded while insolvent prior to the liquidator’s appointment.
Hamish Harker advised the liquidators the business’ failure was “due to concerns about the ability of the company to pay its debts and the health of its main employee who had not been well for some time and struggled to manage the workload”.
A review of the company records by the liquidators revealed the fee revenue from clients had declined by about 13 per cent during the 2020 calendar year, compared to the previous year. There was also debtors totalling about $61,000 outstanding at the date of my appointment, 80 per cent more than 90 days over.
The report states the company has assets of $74,113, as of the latest figures.
Five staff members are owed $39,891 in wages, leave, redundancy and superannuation.
At the beginning of the liquidation three months ago, the company allegedly owed $260,000 in debts.
The liquidators have recovered $70,463 from former debtors, cash at bank and the sale of the client list.
An outstanding amount of $182,829 is now allegedly owed to unsecured creditors.
The liquidator has sought to be paid $86,472, which includes $56,472 for work conducted from December 21 to March 7 and a further $30,000 for future work.
A creditor’s meeting will be held on April 12 at 10am.