Dixon Advisory director Paul Ryan will face civil charges for alleged breaches of director duties after ASIC alleges he made decisions that were to the advantage of Dixon holding company E&P Operations – where he was also a director – rather than the insolvent firm’s creditors.

In Federal Court, ASIC alleged Ryan was involved in amending the constitution of Dixon Advisory on 22 December 2021 to authorise its directors to act in the interest of E&P Operations and executed a deed of acknowledgement of debt on 24 December 2021 between Dixon Advisory and E&P Operations to the advantage of E&P and detriment of Dixon Advisory.

ASIC further alleged that at the time the deed was entered, E&P owed Dixon Advisory over $19 million and was adversely affected from being able to recover those funds, and that Dixon was approaching insolvency and therefore its directors were obligated to consider the interests of creditors.

ASIC deputy chair Sarah Court said directors have responsibilities under the law to act in the best interests of their company which includes considering the interests of creditors when the company is facing insolvency.

“The creditors included thousands of financial advice clients who had invested in the US Masters Residential Property Fund and financial products operated by entities related to Dixon Advisory,” she said in a media statement. “These creditors suffered significant losses.”

Dixon Advisory entered voluntary administration last January, with its AFSL suspended a few months later in April, and by August, ASIC encouraged former Dixon Advisory clients to register complaints to AFCA to be eligible for remediation through the Compensation Scheme of Last Resort.

AFCA received 1726 complaints related to Dixon Advisory in FY23, leading to a 51 per cent year on year jump in the sector.