Two Canberra developers have been banned from managing companies for two years after their involvement in several failed businesses.
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The Australian Securities and Investments Commission confirmed it disqualified Jaime Farrelly and Gary Kelly, former directors of 3 Property Group and associated companies, in October 2023.
Mr Farrelly and Mr Kelly have applied to have the decision reviewed.
ASIC's decision was only made public on January 10 after the directors' attempt to seek a confidentiality order through the Administrative Appeals Tribunal failed.
The regulator's investigation found Mr Farrelly and Mr Kelly were the directors of at least five companies that were wound up with outstanding debts between 2019 and 2021.
ASIC's disqualification decision came one month before the regulator banned another former 3 Property Group director, Paul Hamilton, who had stepped in to manage the companies.
Mr Hamilton agreed to run the companies to allow the former directors to maintain their credit scores and continue managing other businesses, ASIC found.
3 Property Group has been embroiled in a series of development controversies, including the cancellations of off-the-plan townhouse contracts across Canberra which led to a major change in ACT legislation.
In a statement provided to The Canberra Times, Mr Farrelly said the construction industry had been through a "very horrible period" and the directors had suffered as a result.
Confidentiality order refused
While the review of ASIC's decision takes place, Mr Farrelly and Mr Kelly sought to stay the operation of the decision, which would allow them to remain involved in several companies.
They also sought a confidentiality order that would see the review held in private and would prevent ASIC from publishing the decision.
Their attempt to stay and suppress the review of the ban was refused by the AAT at a hearing on December 12, 2023.
In handing down his decision, AAT deputy president Bernard McCabe said Mr Farrelly and Mr Kelly wanted to continue running companies that were involved in a "significant property development" that was expected to make a "handsome profit" for the directors.
Mr McCabe said the two directors had substantial loans that needed to be refinanced but they feared adverse publicity would make this difficult.
"The applicants say they need to remain in control of the companies in question so they can quietly arrange a new finance facility away from the glare of media attention," he said in his judgement.
Mr McCabe said the directors had tried to "convince friends and associates to step in as directors in their place" but had limited success in doing so.
Issuing a confidentiality order would assist the directors in keeping "third parties in the dark" about ASIC's disqualification decision, Mr McCabe said.
He said a suppression order may also undermine confidence in the regulatory body.
Family members in charge of rebranded group
Among 3 Property Group's previous townhouse projects in Canberra are Debut in Wright, Form in Coombs, Vivace and Allegro in Throsby and Avani terraces in Greenway.
A creditors' report of one 3 Property Group company found in 2021 Mr Kelly and Mr Farrelly were listed as current or former directors of 44 and 47 companies respectively.
In 2022, many of the companies were renamed to variations of Elly Property.
Emily Kelly, understood to be Mr Kelly's wife, and Saphyre Ann Farrelly, understood to be Mr Farrelly's 18-year-old niece, are now listed as directors of several Elly Property companies.
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In his statement to The Canberra Times, Mr Farrelly said there had been "no winners as a result of the impacts to the sector".
"Despite our best efforts, both we personally and our families have suffered as a result," he said.
Mr Farrelly said disputes had worsened the company's situation.
"Hopefully things can stabilise within the construction industry as we understand the fall out can affect everyone, including of course ourselves and our families," he said.