Michael O'Sullivan loses appeal against ASIC ban following Provident Capital collapse

Former Provident Capital director Michael O’Sullivan has lost his appeal against his disqualification, with the Administrative Appeals Tribunal (AAT) saying that he showed no “genuine contrition for his conduct or genuine insight into his corporate failures”.

The AAT upheld ASIC's decision that O’Sullivan be disqualified from managing corporations for five years and from providing financial services for seven years.

The AAT qualified the five-year disqualification decision by permitting O'Sullivan to remain as a director of three private companies, provided that those companies only involve activities relating to his immediate family.

The AAT said: “The behaviour of Mr O'Sullivan has fallen below the standard that is expected and required of a public company director.” 

The AAT found his behaviour “involved either a subconscious or at times an attempt to camouflage or massage critical information and to even completely prevent that information from being disclosed on a timely basis”.

The AAT highlighted that “deficient disclosure [of information] was designed to obfuscate the real position” and that this behaviour “put at risk the funds of certain third party investors who were largely being kept in the dark about the precarious nature” of one of Provident's largest loans.

ASIC's commissioner John Price welcomed the AAT finding, saying: “ASIC is committed to taking action against directors who fail to exercise care and diligence in the management of company assets. 

“ASIC's powers to disqualify directors of failed companies and to ban individuals from providing financial services are important preventative measures to safeguard the public interest.”

O'Sullivan had previously been granted a stay of the disqualification order, pending the AAT's review of ASIC's decision.

He has 28 days to appeal this decision to the Federal Court.