ASIC has banned a director of two companies from engaging in credit activities and managing corporations for four years.
Craig Eric Lynch of Sydney was the director of Paramount Financial Services (PFS) and Paramount Finance & Investment Services (PFIS), which were authorised to act as mortgage brokers.
An ASIC investigation found Mr Lynch had breached his duties as a director of PFS and PFIS in his treatment of personal loan accounts held with those companies and in managing the taxation affairs of PFS.
The regulator found Mr Lynch engaged in conduct that resulted in PFS submitting to a credit provider a loan application containing misleading income details of the applicant and a falsified supporting payslip.
According to ASIC, Mr Lynch was also aware of a practice at PFS and PFIS in which clients were instructed to sign blank application forms. Mr Lynch was also found to have breached his duties as a director of PFS and PFIS in relation to the dealings on his personal loan accounts with those companies.
ASIC’s investigation found Mr Lynch diverted $1.6 million of company funds (a ten-year advance on his salary) to pay a debt he personally owed PFS, which went into liquidation seven months later in November 2011.
Between approximately July 2011 and September 2011, Mr Lynch recorded $705,200 received from a third party as a reduction to his personal loan account with PFIS. ASIC noted that this money was supposed to be paid to PFIS as commission for property sales.
In both instances, ASIC found Mr Lynch had misused his position as a director to gain an advantage for himself or cause detriment to the company.
PFS and PFIS were authorised to provide credit assistance by Australian credit licensee Paramount Lending Services (PLS). ASIC cancelled PLS’ Australian credit licence on January 23, 2014 at the request of Mr Lynch, the director of PLS.
Both PFS and PFIS are no longer trading.
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