Former Compass Hotels Group chief executive Bryan Northcote has pleaded guilty to three charges of breaching the Corporations Act.
The charges relate to Mr Northcote’s conduct while he was leading the Compass group, which was listed on the ASX from January 2008 and March 2011.
The Compass group fell into receivership in March last year after struggling to repay its debts after lodging a $3.4 million loss for the half year to December 2010.
The 12 hotel portfolio included the iconic Albion Hotel in Cottesloe, the Kalamunda Hotel and the Carine Glades Tavern.
Mr Northcote pleaded guilty to one count of breaching his duty as a director for dishonestly withholding information from the Compass board between October 2007 and April 2008.
The Australian Securities and Investment Commission alleged Mr Northcote’s company, Yard House Australia and New Zealand, had entered an agreement with a hotel broker where it would receive 50 per cent of all sales commissions paid by Compass to the broker.
According to ASIC, Yard House received $1.566 million in commissions.
Mr Northcote also pleaded guilty to two counts of submitting false documentation to ASIC, showing he had resigned from Yard House on October 1 2007, when that was not the case.
ASIC deputy chairman Belinda Gibson said the case was an example of ASIC taking action when company gatekeepers fail to act honestly.
Mr Northcote will appear again in Sydney’s District Court on January 25, when a sentencing date will be set.