An investigation by the Australian Securities & Investment Commission (ASIC) alleges that Craig Eric Lynch had breached his duties as a director of Paramount Financial Services Pty Ltd (PFS) and Paramount Finance & Investment Services Pty Ltd (PFIS)
Both PFS and PFIS were authorised to act as mortgage brokers.
The investigation by ASIC alleges that in or about April 2011, Mr Lynch diverted $1.6 million of company funds (a 10-year advance on his salary) to payout a debt he personally owed to PFS. PFS went into liquidation seven months later in November 2011.
ASIC also allege that between about 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.
That sum was supposed to be paid to PFIS as commission for property sales.
In both instances ASIC’s investigation alleges that Mr Lynch had misused his position as a director to gain an advantage for himself or cause detriment to the company.
ASIC also allege that Mr Lynch was not a fit and proper person to engage in credit activities, as he had allegedly 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; was allegedly aware of a practice at PFS and PFIS that clients were instructed to sign blank application forms; and had allegedly breached his duties as a director of PFS and PFIS in relation to the dealings on his personal loan accounts with those companies.
ASIC deputy chairman Peter Kell said the regulator expects company directors to meet the responsibilities their positions come with.
“The position of company director comes with certain responsibilities and when those responsibilities are breached, ASIC will take steps to remove directors from managing companies,” Kell said.
