Corporate regulator targeted

In early submissions to the Senate’s inquiry into administrators and liquidators, CRS Warner Kugel partner Steven Kugel said the Australian Securities and Investments Commission needed to take a similar approach to that of the bankruptcy industry.

“There is now a general perception of inaction by ASIC in relation (to) all but the most extreme behaviours, despite liquidators reporting offences,” he said.

“(In the field of bankruptcy,) the trustee who is seen to have seriously breached their duties will be issued with a Category A or B breach (and), from this, the trustee will be sent to counselling or be asked to show cause why he should remain registered.

“ASIC does not undertake similar reviews, perhaps because it has very limited funding.”
The inquiry was established in November after Nationals Senator John Williams claimed there was corruption in the sector.

The inquiry is to investigate the fees and practices of administrators and liquidators.
It is also to investigate whether ASIC should take a different role when companies go into administration.

A second early submission to the inquiry calls for a Government help line for people facing administration.

Nationals MP Darren Chester said a small businessman in his electorate was “pressured” into signing his company into administration.

“My constituent was under the impression that his banks, staff and creditors would be paid and given the amount of assets the companies held. He cannot understand why, to this day, the administrator has paid the banks and has sold off remaining assets to pay the administration fees.”

The inquiry will accept submissions until February 12, and is due to report by August 31.