Former directors of self-proclaimed Google challenger Uglii Group have been disqualified from managing corporations for four years.
The Australian Securities and Investments Commission (ASIC) said that the action follows an investigation into the affairs of six companies within the Uglii Group that led the winding up order of these by the Federal Court of Australia in 2016 and 2017.
The case began when ASIC became concerned that the Uglii Group companies were unable to pay their debts, with the corporate regulator saying at the time that it "lacked confidence" in the management of the companies.
During its investigation, ASIC found that Heather Knorr and Ge Zhu failed to prevent Uglii from incurring further debts once it was insolvent.
Knorr also failed to make enquiries as to the financial position of Uglii with regards to loans made by and to it; failed to discharge her powers and duties with the requisite care and diligence in failing to ensure that funds raised by Uglii through the sale of 'fighting fund shares' was used for the purpose for which it was raised, among other things.
Meanwhile, ASIC found that Zhu also failed to failed to exercise her powers and discharge her duties with the required due care and diligence by failing to ensure that funds raised by Uglii by the sale of 'fighting fund shares' were used for the purpose for which they were raised; failed to ensure the lodgement of Uglii's financial reports and failed to perform the duties of a company officer.
On 6 December 2016, the Federal Court of Australia, upon the application of ASIC, ordered the wind up of Uglii, Traralgon Technology, Uglii Find Australia, BizMio and Projects Discovery Services and appointed Robyn Erskine and Adrian Hunter of Brooke Bird as liquidators.
On 2 March 2017, the court ordered that Uglii Ads System be wound up and that Erskine and Hunter be appointed as liquidators.
The Corporations Act empowers ASIC to disqualify a person from managing corporations for up to five years if, within a seven-year period, the person was an officer of two or more companies, and those companies were wound up and a liquidator provides a report to ASIC about the company’s inability to pay its debts.
Uglii Corporation was incorporated in 1998, and was based in Traralgon, Victoria.