A Sydney-based man involved in the sale and marketing or mobile ring tones and Internet kiosks has been banned by the Australian Securities and Investments Commission (ASIC) after racking up $2.4 million in debt.
Daniel Albert, the man behind three failed companies- I E Networks, Photo Safe Australia and Data Vault Services, has been banned from managing companies for three years.
The ban follows a decision by ASIC that Albert had breached the Corporations Act by managing the companies in such a way that they incurred substantial debts and were unable to pay creditors more than 50 cents in the dollar.
According to ASIC he also failed to comply with the requirement to keep adequate financial records and entered into agreements on the company's behalf with members of the public to supply Internet kiosks in circumstances where he knew that he could not supply them.
"Just because you have a cool or groovy product, doesn't mean you are going to be successful if you do not respect the Corporations Act," said ASIC's national assessment and action director, Adrian Borchok.
Distributors and franchisees that signed up with the three companies are each owed nearly $120,000 of the $2.4 million debt.
"Just because Daniel Albert was a small-time operator does not mean the implications are not serious," Borchok said.
"People who become officeholders without understanding their role and responsibilities risk regulatory action if they fail to conduct their duties properly. Company officers have important responsibilities to uphold and must not disregard their obligations to consumers, creditors and the like," he said.