Former Continental Coal director sentenced

Ashley Paul D'Sylva has been sentenced to eight months imprisonment after pleading guilty over financial misuse while he was a director at Continental Coal.

Despite the sentence, D'Sylva is to be released immediately after entering a recognisance release order of $5,000 and an 18-month good behaviour order.

D'Sylva, of Leederville, was charged with one count of recklessly failing to exercise his powers while being a company director in August 2020.

He pleaded guilty in December.

The Australian Securities and Investments Commission alleged D'Sylva sourced $1 million of bridging finance from Celtic Capital to recapitalise formerly ASX-listed company Continental Coal in February 2014.

According to ASIC, Celtic Capital was a client of D'Sylva’s business Empire Equity.

ASIC’s investigation into Continental Coal found that Celtic Capital paid $1 million to Continental Coal as part of a company restructure, with the funds only to be used for paying the latter’s trade creditors, undertaking a rights issue and paying approved company expenses.

However, ASIC alleged D'Sylva used his position dishonestly by authorising a $915,000 repayment to Celtic Capital despite being aware of Continental Coal’s financial difficulties and the restrictions placed on the $1 million funds.

Continental Coal entered into liquidation in 2016, with McGrathNicol partner Robert Kirman appointed as liquidator.

Supreme Court Justice Amanda Forrester said D'Sylva jeopardised the trust of investors and shareholders by failing to act in the best interests of the company, according to an ASIC statement published today.

“Her Honour further noted that notwithstanding the urgency and pressure arising from the recapitalisation of Continental Coal, it is during such difficult times that rigorous compliance with directors’ duties is most important,” the statement reads.

Former Continental Coal director Peter Landau and company secretary Jane Flegg were also charged.

Mr Landau has pleaded guilty to nine charges in the Stirling Gardens Magistrates Court last year, with his sentencing scheduled in June.

It has been alleged that Mr Landau stole $2.2 million of applicant funds from Citation Resources when he was a director there and forged a bank statement to show Citation had $675,658 when its account had less than $120.

Mr Landau allegedly gave false and misleading information on the ASX, namely that Continental Coal received $2.6 million from investors when they had only received about $57,000.

Ms Flegg has pleaded not guilty. Her trial is scheduled for early next year.

Continental Coal was a Perth-based ASX-listed mining and exploration company with mining assets in South Africa.