04-200 Insolvent trader sentenced to jail
Thursday 24 June 2004
Mr Jeffrey Lucy, Chairman of the Australian Securities and Investments Commission (ASIC), today noted the sentencing of Mr Timothy Rhys Hawker Williams, of Mount Nelson, Tasmania, to 15 months imprisonment following his plea of guilty to 38 charges of insolvent trading and two counts of fraudulent conduct.
The charges were laid following an investigation by ASIC into the failure of Cotech Pty Ltd (Cotech).
Cotech produced baby furniture (cots and change tables) at Goodwood in Tasmania and went into liquidation on 20 October 2000 with debts to creditors of more than $1.7 million.
The Court found that:
- between 20 December 1999 and 10 September 2000, Mr Williams, while a director of Cotech, dishonestly failed to prevent Cotech from incurring debts of $329,979 when there was reason to suspect that the company was insolvent; and
- between 15 February 2000 and 3 March 2000 Mr Williams was knowingly concerned in Cotech making two false representations to BRG Capital Facilitation Pty Ltd, in contravention of the Corporations Act. The total amount involved was $50,000.
In passing sentence, Justice Evans noted that, ’those involved in the commercial world are expected to conform to demanding standards of honesty and if they engage in commercial crime, they must expect condign punishment’.
‘This is the first occasion where a person charged with insolvent trading has been sentenced to serve time in jail. Preventing an insolvent company from incurring debts is one of the most fundamental obligations owed by company directors, and as this case shows, the consequences of failing to satisfy this obligation can lead to imprisonment’, Mr Lucy said.
Mr Williams will be released after serving six months of his sentence upon entering into a recognisance in the sum of $2,000 to be of good behaviour for a period of two years following his release.
This matter was prosecuted by the Commonwealth Director of Public Prosecutions.
ASIC Website: Printed 02/10/2010
