ASIC sues Dixon Advisory & Superannuation Services Pty Limited director
ASIC has initiated civil penalty proceedings in the Federal Court against Paul Ryan, director of Dixon Advisory & Superannuation Services Pty Limited, alleging breaches of directors’ duties.
ASIC alleges that Mr Ryan failed his duties as a director by his involvement in decisions that are alleged to be to the advantage of Dixon Advisory’s holding company, E&P Operations Pty Ltd. All thew while failing to properly consider the interests of Dixon Advisory’s creditors. It is noted that Mr Ryan was also a director of E&P Operations.
Sarah Court, ASIC Deputy Chair, emphasised that directors are legally obligated to act in the best interests of their company, including considering the interests of creditors during insolvency.
Specifically, ASIC alleges that
Mr. Ryan was involved in amending Dixon Advisory's constitution on December 22, 2021, to explicitly permit directors to act in the interest of E&P Operations.
Mr. Ryan executed a deed of acknowledgment of debt (Deed) on December 24, 2021, which ASIC asserts benefited E&P Operations while adversely affecting Dixon Advisory.
At the time of executing the Deed, Dixon Advisory was reportedly nearing insolvency, heightening the directors' obligation to prioritise creditor interests.
Background Information
Dixon Advisory and E&P Operations were wholly owned subsidiaries of E&P Financial Group Limited.
Dixon Advisory previously held an Australian Financial Services licence and operated in financial advice, managing investments, and superannuation administration for retail clients.
Since 2020, Dixon Advisory has been embroiled in legal actions stemming from financial advice provided to clients, particularly concerning investments in the US Masters Residential Property Fund (URF) and related products issued by entities linked to Dixon Advisory.
These legal challenges included:
ASIC’s Federal Court case resulting in substantial penalties and costs
Complaints to the Australian Financial Complaints Authority (AFCA)
Three Federal Court proceedings, including two class actions.
Following the December 2021 constitutional amendment and subsequent acknowledgement of the Deed with E&P Operations, Dixon Advisory directors opted for voluntary administration on January 19, 2022.
ASIC subsequently suspended Dixon Advisory’s AFS licence on April 8, 2022, and canceled it effective April 5, 2023 as per their Media Release (22-094MR).
A deed of company arrangement (DOCA) was approved by Dixon Advisory’s creditors on the 16th of December 2022, stipulating a payment from E&P Operations totalling $17,662,489, to Dixon Advisory, less a settlement adjustment for administration expenses.
Update
The trial on liability concluded in June 2024, with Justice O'Callaghan reserving judgment.
This information comes from the ASIC Media Release (23-208MR) published on the 4th of August 2023, and is correct at the time of publishing
