The authorities responsible for overseeing the conduct of corporations frequently remind the public of the cost of illegal phoenixing.
Billions lost every year. Responsibly run businesses damaged through innocent association with unscrupulous recidivists. The undermining of public confidence in free and fair markets.
“In 2016, evidence was obtained by the Australian Taxation Office “during an access without notice” attendance on the debtor suggesting his personal living and household expenses were not consistent with his reported income.” Judge Anthony “Tony” Kelly.
So what happens when these authorities get a habitual proponent of illegal phoenixing, a man who’s reportedly cost the Commonwealth more than $15 million in unpaid taxes, dead to rights?
They impose the maximum ban allowable in the circumstances, which it turns out will prevent Philip Damien Whiteman – also known as Philip Damien Graham – from managing corporations for a period of five years, though the utility of such a ban is questionable given Whiteman is currently a bankrupt, again.
iNO readers will recall the how the fuse on this long running saga was lit after the Australian Tax Office (ATO) in 2017 obtained orders for the appointment of Pitcher Partners Andrew Yeo and Gess Rambaldi as provisional liquidators to Whiteman’s Armstrong Shaw accounting and advisory group.
Subsequently A&S Services Australia Pty Ltd A&S); Bolton & Swan Pty Ltd (B&S); ACN 147 341 991 Pty Ltd (DNV); Armstrong and Shaw Pty Ltd (Armstrong); and Ainslie Harding & Wood Solicitors Pty Ltd (AHW) were wound up, the Pitchers pair were appointed liquidators and, armed with funding from the ATO, unleashed.
Weeks of public examinations followed involving multitudes of examinees, including some prominent Victorian liquidators who’d accepted referrals from Whiteman or his cronies, who included struck off former liquidator Andrew Dunner.
Whiteman was eventually bankrupted in September 2021, a state with which he is not unfamiliar having been previously a bankrupt from January 2010 to March 2014.
Now, two years later, ASIC, the authority responsible for enforcing penalties against directors found to have broken the law, has slapped him on the wrist with an almost pointless five year ban.
If the the powers that be want the public to have confidence that they are safeguarding the integrity of the system, this ban needed to represent the beginning and not the end of the enforcement measures planned for Mr Whiteman.
But an ASIC spokeswoman today said the regulator had concluded its investigations and chosen not to proceed with further action.
This is despite the judge who first found in the ATO’s favour in 2017 ruling that the AS Group corporate defendants” were collectively operating a business of defrauding creditors involving phoenix activities for their clients”; that those corporate defendants were controlled by the Whiteman; that he was the de facto director of each of them and that other persons registered as directors were merely ‘puppets’. See: Deputy Commissioner of Taxation; in the matter of Whiteman v Whiteman  FedCFamC2G 131
If you’re wondering how law breakers develop their sense of impunity, ASIC’s attitude is the answer.(Read the ASIC release)