Gutnick disqualified from managing corporations

Joseph Gutnick, the man behind the thwarted Legend International plans for a major phosphate mining and fertiliser production operation in North-West Queensland, has been disqualified from managing corporations. ASIC has disqualified the St Kilda East resident from managing corporations for a period of four years following his involvement in three failed companies between June 2016 and March 2020. 'Diamond Joe' Gutnick was a director of Axis Consultants (deregistered); Merlin Diamonds (in liquidation); and Legend International Holdings (in liquidation). In 2020, following a successful ASIC application, the Federal Court of Australia made orders to wind up Merlin on insolvency grounds. The Corporations Act allows ASIC to disqualify a person from managing corporations for a maximum period of five years if, within a seven-year period, the person was an officer of two or more companies, and those companies were wound up and a liquidator provides a report to ASIC about each of the company’s inability to pay its debts. ASIC said Legend and Merlin owed a combined total of more than $43 million to unsecured creditors, including the Mount Isa City Council and Queensland Department of Transport as well as various bodies in the Northern Territory and Western Australia. ASIC found that Mr Gutnick acted improperly and failed to meet his obligations as director, in that he: exercised his powers as a director of Legend after it was wound up, allowed Merlin to lend funds totalling $13,752,124.78 to Axis in circumstances where the loans caused detriment to Merlin and gave an advantage to Axis, allowed Merlin to trade while insolvent, failed to ensure Merlin maintained complete financial records, failed to ensure Merlin complied with its obligations as a public company, allowed Axis to lend money to related parties in circumstances where the loans were undocumented, not fully supported and verified with documentation, failed to monitor and oversee Axis’s financial affairs, and failed to assist the liquidator of Axis when requested. Mr Gutnick has the right to seek a review of ASIC’s decision by the Administrative Appeals Tribunal. The former Melbourne Football Club president and winner of the Diggers award at the 1997 Diggers and Dealers Industry Awards has most recently been working with Mazel Resources on the Moina fluorspar project in Tasmania. A new company - North West Phosphate - is now advancing projects on the Mount Isa region tenements once held by Legend, including Paradise South, Paradise North and D Tree.

Gutnick disqualified from managing corporations

Industry Queensland

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