Mehajer and Aysha, in happier times. Pic: YouTube.

The Administrative Appeals Tribunal (AAT) has upheld the Australian Securities and Investments Commission’s (ASIC) decision to disqualify Auburn Council’s controversial former Deputy Mayor Salim Mehajer from managing corporations for three years.

ASIC pressed for the ban in late 2015 after discovering that Mehajer’s property management and construction companies, SMPD P/L and SMEC P/L, collapsed owing the Australian Tax Office (ATO) more than $1 million.

ASIC’s findings against Mehajer included:

• SMPD and SMEC failed owing $886,701 and $159,206, respectively to the ATO
• Mehajer failed to ensure SMPD lodged returns with the ATO and only provided information to SMPD’s liquidator after ASIC took criminal proceedings against him.
• ASIC also found Mehajer’s conduct lacked ‘commercial morality’ because he let SMPD
• collect $315,192 GST from selling townhouses but hid this from the ATO
• SMPD kept scrappy financial records, which hindered the liquidator’s work to track whether payments made by SMPD to third parties were above board

The Commission originally disqualified the Lidcombe developer from managing corporations in November 5, 2015 after receiving concerning reports from the liquidators of SM Property Development Pty Ltd and SM Engineering and Constructions Pty Ltd.

Mehajer appealed the decision four days later and successfully sought a stay of ASIC’s decision, as well as orders suppressing publication of his disqualification and AAT appeal.

This week, ASIC’s judgement was upheld by the Tribunal which found that, “Mr Mehajer’s management of SMPD P/L and SMEC P/L, together with his conduct in relation to their business and property, fell far short of what is reasonably expected of a director.”

The troubled Mehajer, whose behaviour has become increasingly bizarre since his marriage to Aysha Learmonth broke down, was slammed by the Tribunal for adopting a “cavalier approach” to managing his companies, including failing to meet his responsibilities to creditors after the two companies failed and not fulfilling his legal obligations.

The AAT said that Mehajer’s three-year disqualification was “appropriate to protect the public and to allow Mr Mehajer time to properly acquaint himself with the duties of a director of a company and his obligations to those with whom the company may transact.”

ASIC Commissioner Greg Tanzer welcomed the AAT’s finding.

“ASIC’s power to disqualify directors of failed companies is an important preventative measure we use to safeguard the public interest,” Mr Tanzer said.

The AAT decision was subject to a suppression order that expired on 2 September 2016. Mehajer’s disqualification will end on November 5, 2018.

The disgraced Mehajer has recently hinted on his Instagram account that may be leaving Australia imminently, which could be tied up in his plans to sell his own range of skincare products. His Instagram post featured a tall ship on Sydney Harbour and said: Good-Bye (sic) Australia, will be taking off to pursue my dream challenges. I’ll be back.”

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