Director disqualification imposed on south Auckland chartered accountant Timothy Toilolo was overturned in the High Court. Companies Office could not argue he was a commercial risk to the public when it took over four years to decide on disqualification.
In 2014, Westpac bankrupted Mr Toilolo and put his accounting services company into liquidation. Companies Office investigations found his company was illiquid from the start and that Mr Toilolo failed to keep proper business records. This company insolvency followed the collapse of his previous accounting services company: Professional Accounting & Taxation Ltd. Liquidator’s report for Professional Accounting shows the company’s fee base was sold to Mr Toilolo to provide clients for his second, unsuccessful, business. This report states Mr Toilolo paid only $9700 towards the fees purchase, defaulting on the balance promised.
Mr Toilolo was discharged from bankruptcy in August 2017. During bankruptcy, he was disqualified from managing any business. Over twelve months later, Companies Office staff issued a banning order, further prohibiting Mr Toilolo from managing any company for the next two years and six months. He appealed.
Companies Office told the High Court Mr Toilolo put the public at risk: he traded companies whilst insolvent; did not exercise proper managerial oversight; and did not keep proper accounting records, a skill which should be a core competency for a chartered accountant.
The purpose of banning orders is to protect the public, Justice Wylie said. Timeliness is relevant. Companies Office delays undermined any argument Mr Toilolo remained a risk to the public, he ruled.
re Timothy Toilolo – High Court (17.05.19)
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