Also disqualified from managing corporations for five years
Corporate regulator ASIC has banned a former Magnolia Capital Group director from providing financial services and engaging in credit activities for 10 years.
ASIC also disqualified the former director, Mitchell Atkins of Erina on NSW’s Central Coast, from managing corporations for five years.
Atkins was a director of the Magnolia Capital Group of companies which collapsed in 2022 owing unsecured creditors millions of dollars.
In an ASIC media statement on its website, the regulator said the group of companies operated businesses between 2018 and 2022 that provided investors with financial advice and services covering secured lending transactions and share investment.
Liquidator's report into Magnolia Capital Group
Atkins was a director of all the companies in the Magnolia Capital Group, including 13 companies. A liquidator’s report was lodged with ASIC, identifying that the companies were unable to pay their unsecured creditors more than 50c in the dollar.
The liquidators reported a deficiency to creditors of between $40 million and $50 million, and on March 2, 2023, Atkins was declared bankrupt.
On June 2023, ASIC obtained an order from the Federal Court of Australia to restrict Atkins from leaving Australia for a period of six months.
From September 19, 2018, to October 7, 2022, Atkins was an authorised representative of Australian financial services licensee Guildfords Fund Management Pty Ltd (Guildfords).
ASIC reveals its findings regarding Mitchell Atkins
ASIC’s findings included that Atkins:
- failed to act in good faith as a director by putting investor funds at risk, showed a lack of honesty and integrity by creating false documents, co-mingling investor funds and displayed a lack of competence, professionalism and financial management such that it is in the public interest that he be disqualified from managing corporations;
- is not a fit and proper person to provide financial services due to him dealing in financial products without authorisation from Guildfords, making misleading and deceptive representations to investors about their investments and dishonestly retaining investor funds which were due to be repaid to investors; and
- is not a fit and proper person to engage in credit activities, including because he failed to undertake training, deal with investor complaints and to respond to requests from Guildfords.
Atkins has the right to apply to the Administrative Appeals Tribunal for a review of ASIC's decisions. His disqualifications and bannings are recorded on ASIC's banned and disqualified register.
ASIC is continuing its investigation into the affairs of the Magnolia Capital Group.
