The move is the biggest by the regulator because it looks into the events during the financial crisis from mid-2007. Its action puts directors of other fallen companies on notice, including ABC Learning Centres, Allco Finance Group and Babcock & Brown.

ASIC said it was seeking declarations from the court that the directors and an officer breached their duties owed to entities within Centro, would be seeking orders to disqualify the directors and the officer from managing corporations and would ask the court to impose pecuniary penalties on them.

The ASIC action revolves around the financial reports of the Centro Group for the year ended 30 June, 2007, with the regulator contending that the reports contained material misstatements. 

Centro shares collapsed more than 99 per cent from the end of 2007 when it admitted that more than $2 billion of debt it had classified as long-term was in fact repayable much earlier. 

This is the second recent case being brought by ASIC against directors of companies. As the New Lawyer reported on Monday, ASIC alleges former Australian Wheat Board boss ANdrew Lindberg, who is standing trial in the Victorian Supreme Court, breached his duties to AWB by failing to stop about $300 million in kickbacks to Saddam Hussein's regime. 

ASIC alleges AWB made no effort to investigate whether the fees were justified. It claims Lindberg was aware, or should have been aware, of the payments. Lindberg, meanwhile, will argue he did not know of the payments. 

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AS business commentator Robert Gottliebsen reported this week, both cases are a reminder that "it is very dangerous to turn a blind eye to an event taking place in your company".