Six former directors of corporate trustee Firezone Protection Services have been disqualified by the Australian Prudential Regulation Authority (APRA) for failing to act honestly and exercise their powers in the best interest of Firezone Superannuation Fund’s beneficiaries.
Thomas Brown, George Long, Paul Provan, Allan Silsby, Malcolm Spinks and Emmanuel Ungaro have all been disqualified from acting as a trustee, investment manager or custodian of a superannuation entity.
The fund had 15 members made up of the current directors and the former directors of Firezone. Most of the fund’s $1 million in assets were a single unencumbered property that was held through a unit trust.
In July 2006 an acting trustee was appointed by APRA to effect the wind-up of Firezone Superannuation Fund, after finding that the corporate trustee had breached the Superannuation Industry (Supervision) Act 1993 (SIS Act) by improperly obtaining financial assistance using the fund’s resources.
In February 2002, the corporate trustee refinanced an overdraft facility to inject finance into their business interests. The overdraft was secured by guarantees and indemnities provided by the corporate trustee and its directors.
The corporate trustee contravened the SIS Act when a mortgage was also taken over the fund’s property to secure the overdraft loan in order to provide working capital for the corporate trustee’s trading practices.
During 2005, the corporate trustee obtained a $64,000 loan from the fund that was incorrectly reported as the payment of member benefits and was never repaid, resulting in a loss to the fund. The trustee encountered further financial difficulty in late 2005 and sold the fund’s property to meet its liabilities. As part of the sale, the lender required that the mortgage be paid out so it could recover its loan funds of $359,300, which resulted in the fund incurring another loss. The corporate trustee subsequently went into liquidation.
