The former managing director of failed Kyabram-based investment company Banksia has been fined $25000 and disqualified from managing corporations for five years.
The Federal Court of Australia found Patrick John Godfrey failed to meet proper accounting standards and Mr Godfrey’s recommendations for dealing with bad and doubtful debts resulted in Banksia’s financial reports failing to give a true and fair view of the company’s financial position.
The court also found Banksia’s financial reports for 2011 and 2012 did not comply with accounting standards and did not give a true and fair view of the financial position and performance of the company.
It found statements in the 2011 prospectus were misleading or deceptive.
Five years after the collapse of Banksia with $660million in losses, investors are only just beginning to see the possibility of recovering the bulk of their investments.
In his judgement, the Federal Court’s Justice Moshinsky noted that to date, each debenture holder had been paid at least 80¢ in each dollar invested.
He also noted Mr Godfrey had co-operated fully with ASIC in its investigation and he had acted honestly in his provision for recovering the value of assets.
Justice Moshinsky found the penalty and disqualification order that ASIC and Mr Godfrey had jointly submitted were appropriate and should be made.
ASIC Commissioner John Price said the reporting of accurate financial accounts was vital.
‘‘The importance of ensuring that the financial accounts of a company are reported in accordance with the law by complying with the correct accounting standards is essential to provide assurance and market confidence,’’ Mr Price said.
‘‘Mr Godfrey fell short of the standards required of him in this case.’’
Kyabram Banksia Debenture Holders Action Group co-founder Don McKenzie said increasing reimbursements to investors were largely thanks to the tireless efforts of the action group since Banksia’s collapse in 2012.
Reimbursements are set to rise to up to 93 cents before the final wind-up of the liquidation in the next six months.
It is also forecast a payment of about eight cents will be made before the end of March with the balance to follow pending action against Banksia’s insurers and others.
—With Kyabram Free Press