It looks like ex-LWP director Sean Corbin is up to his old tricks again. His latest escapade bears all the hallmarks of director phoenix activity.
Illegal director phoenix activity.
Word came through this week that Corbin’s Franchise Retail Brands has been placed in administration. The foul stench that is now lingering has all the hallmarks of a Corbin swiftie.
Previously, we wrote about the shady early days of Franchise Retail Brands which was created by ex-LWP directors Corbin and Siegfried Konig using LWP shareholder funds in an undisclosed related party transaction which the ASX ordered to be reversed. Corbin and Konig disputed this ruling despite being the donor, advisor and receiver of these funds under 3 different entities.
A recent Courier Mail article (Franchise Retail Brands in Liquidation) reveals that Franchise Retail Brands closed the doors owing more than $500,000 to creditors. Of note is the fact that some of the Mexican outlets had gone to a new Franchising operation. It just so happens that Corbin recently registered a new Franchising operation – Phoenix Franchising.
Illegal Phoenix Activity
Illegal (e.g. fraudulent) phoenix activity generally involves company directors deliberately trying to avoid paying the company’s creditors. In this way, the directors seek to avoid paying any creditors including employees through the failed company’s liquidation.
To carry out a Phoenix operation, pre insolvency advisers, or “facilitators”, manipulate the corporate system by installing “dummy” directors in companies to shield the real directors from liquidators, creditors and the Australian Taxation Office (ATO), and were even able to backdate those appointments in the Australian Securities and Investments Commission’s (ASIC) system to make it appear the dummy director had been in place for much longer.
Directors Sean Corbin, William Ehmcke and Bill Velkovski were replaced with Blagoja Velkovski and Bruce Dwyer as directors of Franchise Retail Brands shortly before being placed into administration. William Ehmcke was replaced just one day before the administration event.
Several of Franchise Retail Brands former Mexican outlets look to have moved to Corbin’s new Franchising Venture, leaving the $500,000 owed to creditors and investor losses in excess of $5 million in his wake.
It is hard to work out whether Corbin is incredibly stupid or confident that his network of associates enabling such activity and the toothless tiger reputation of ASIC will allow him to carry on.
A complaint has been made to the regulator in anticipation that they will realise that this is more than just the gripes of a few malcontent’s. So over to you ASIC.
ASIC are you there?