Former director jailed over $1.75m company fund transfers

Usman Siddiqui, the former sole director of Equitable Financial Solutions, which provided Sharia-compliant investment and lending products to the Australian Muslim community, was sentenced to six years and six months’ imprisonment on 6 August in the District Court of NSW.

Siddiqui pleaded guilty on 17 June to two counts of dishonestly using his position as a director, while a third offence was taken into account in sentencing for count one. He will not be eligible for parole for three years and three months.

The offences relate to a period between May and October 2019, where Siddiqui transferred approximately $1.75 million from Equitable Financial Solutions’ accounts to his personal accounts and then to accounts he held overseas.

At the time of the transfers, the Australian Securities and Investments Commission (ASIC) said that Siddiqui was aware the company was in a “dire financial position.”

By the middle of 2019, Siddiqui was aware the Australian Financial Complaints Authority had made numerous determinations against Equitable Financial Solutions totalling more than $1 million.

The company’s clients were also waiting for refunds of their investments totalling approximately $11.3 million, while one client had commenced legal proceedings to recover a $3 million investment.

Equitable Financial Solutions was placed into liquidation on 26 November 2019, with the company owing more than $20 million to creditors, including its clients, by February 2020.

The liquidators considered the company likely became insolvent around 1 July 2016.

In sentencing Siddiqui, Judge Anderson SC noted the offending involved multiple occasions of intentional dishonest use of his position.

Judge Anderson also noted that general deterrence plays a particularly important role in sentencing for offences committed by white-collar criminals.

ASIC Chair Sarah Court said directors hold positions of trust and are required to act in the best interests of their companies.

“Mr Siddiqui abused that trust by dishonestly misappropriating company funds for his own benefit,” Court said.

“This sentence reflects the seriousness of that conduct and serves as a warning that ASIC will take action against directors who abuse their responsibilities for personal gain.”

[Related: Brokers sound warning as ASIC cracks down on ‘finfluencers’]

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