The SME Association of Australia has been forced to defend itself against accusations of governance failures.
The organisation was founded in 2011 and has just under 5000 members with 38,000 subscribers to its database.
A former SME Association of Australia (SMEAA) member has accused the association of failing to hold annual general meetings, failing to produce annual financial statements for members and of having an insufficient number of directors and board members.
Queries have also been raised over the chairman of the SMEAA, Craig West, who was previously banned as a director by ASIC in 2006.
The SMEAA has come under increasing scrutiny following the collapse earlier this year of the ASX listed publishing company, CommStrat, which it was previously linked to.
The SMEAA’s website previously stated that it was supported through “a service agreement with CommStrat Limited for the provision of administration, education and membership services to its members”, however this reference has now been removed.
The SMEAA’s former chief executive, Steve Maidens previously told SmartCompany the association has not had a relationship with CommStrat for a number of years.
CommStrat turned over $6 million last financial year and was the publisher of the SMEAA’s official publication, the MyBusiness magazine but West says CommStrat is no longer associated with the SMEAA.
West has hit back at the poor governance allegations while conceding he was previously banned as a director following the failure of All State Partners, All State Accounting & Taxation Services, and All State Business Solutions.
“That is absolutely true and it is on the public record,” he told SmartCompany.
“I was banned and the ban expired in 2010. The professional organisations that I am a member of, which includes Family Business Australia, are all aware of that ban.”
West is now a partner in the business Succession Plus and he says the ban is not relevant to his current role.
“I just don’t see what that has to do with the SME Association,” he says.
West acknowledges the SMEAA doesn’t currently have the required number of directors with only two directors, West and Mark Flack, but says this is an issue the association is working on.
“We currently do not have the correct number of directors but we have made invitations to four new people to join the board we have a meeting in September to brief them on this,” he says.
West says the SMEAA did hold an annual general meeting for the last financial year and produced an annual financial statement.
An accounting error meant that the SMEAA mistakenly registered with ASIC as having the requirement to file annual financial statements but West says the SMEAA is a small company limited by guarantee and so is not under this obligation.
West says the SMEAA provides financial statements to its members on request but no members have ever requested them.
“It’s a not for profit organisation,” West says.
“I don’t get paid. It’s not as if its a business turning over millions of dollars and I’m siphoning it off. I can assure you I’m putting in money, not taking it out.”
*This article was updated at 12.30pm to include a reference to the SMEAA’s financial reports and to the collapse of All State Partners, All State Accounting & Taxation Services, and All State Business Solutions.