The director of an insolvent group that allegedly guaranteed tenants for rental properties has been banned.
Financial services regulator ASIC announced that it had banned George Nowak from providing financial services until July 2017 on the basis he is an undischarged bankrupt.
Mr Nowak is the director of Charterhill Group, whose four related entities entered insolvency in January-February 2014 with $19.1 million of debt, according to recent ASIC documents.
The Adelaide-based group offered a range of services including property management, real estate marketing, mortgage broking, contract negotiation and SMSF advice.
ASIC’s ongoing investigation found that Mr Nowak applied for personal bankruptcy in July 2014, as Residential Property Manager reported earlier this month.
“Mr Nowak is banned from providing financial services for the period of his bankruptcy,” ASIC said.
“He is also automatically banned under the Corporations Act from acting as company director and being involved in the management of companies for this period.”
Fairfax Media reported last September that Mr Nowak allegedly claimed that he could help property investors benefit through the National Rental Affordability Scheme.
“Investors in Charterhill, some of whom have lost their life savings, say Nowak told them tenants for their investment properties, which they had leveraged through their DIY super funds, were guaranteed under the National Rental Affordability Scheme,” Fairfax reported.
Mr Nowak has also been caught up in concerns about possible insolvent trading.
One of Charterhill’s four companies, Lending Solutions International, may have traded while insolvent, according to a report by its liquidator, Heard Phillips.
“Our investigations indicate that the company may have traded whilst insolvent and, consequently, the director may be liable for the debts incurred during this period, which remain outstanding at the date of our appointment,” the report said.
“We note, however, that on 2 July 2014 the director filed a petition for his own bankruptcy and the trustee of his bankrupt estate advised that there is no likelihood of any dividend to unsecured creditors.”