Investigation ordered into Controller’s performance of its functions and powers under s423 of the Corporations Act

BACKGROUND

Quality Blended Liquor Pty Ltd (QBL) was involved in the business of selling alcohol wholesale and was operated by a family through a company they controlled, International Network Consultants Pty Ltd (INC).

The facts are contested, but for the purposes of this article, it may be said that:

• QBL invited Warren Tschannen to invest in it, through a company called Toyco Australia Pty Ltd (TA) of which Mr Tschannen's niece was the director.
• In late 2013, TA loaned QBL, and companies associated with it, around $1 million. The documents purportedly recording the terms of the loan and security were executed in January 2014.
• Relations between QBL and Mr Tschannen deteriorated rapidly and in February 2014, TA claimed that the associated companies of QBL had failed to make repayments due under the loan and appointed Mr Tschannen to be 'controller' of the QBL companies to take day to day control of the business (Controller).