ASIC prosecutes 100 for failing to assist liquidators
The corporate watchdog has released its latest prosecution figures amid parliamentary scrutiny over its enforcement powers.
ASIC has prosecuted 100 individuals for failing to assist liquidators with insolvency proceedings, reaping over $430,000 in fines during the first half of the year.
The 100 prosecuted individuals were guilty of 194 offences under the Corporations Act 2001 by not providing liquidators with access to company books and failing to submit a report on company activities and property (ROCAP) after a company had been placed in external administration, the watchdog said.
ASIC deputy chair Sarah Court said the high number of prosecutions reflected a recent rise in insolvency numbers.
“After a period of low corporate insolvencies in recent years, insolvency numbers have continued to rise over the last six months," she said.
Ms Court said the individuals were located throughout Australia and prosecuted summarily in local and magistrates courts by ASIC and the Commonwealth Director of Public Prosecutions.
"Company officers are required to provide reports and company books to liquidators so the liquidator can quickly and accurately determine an entity’s financial position and the best outcome for creditors,” she said.
“ASIC will take action where directors fail to meet these fundamental obligations,” she said.
ASIC insolvency figures showed that insolvencies surged in the last financial year to 7,942. This marked a dramatic 62 per cent increase from FY2022 numbers.
In FY2024, there have been 2,491 insolvencies to date, up 21.5 per cent compared to the same period last financial year.
Insolvencies have been particularly prominent in the construction industry, with 815 companies entering external administration this financial year, a 28 per cent increase compared to last year.
However, the watchdog’s powers to respond to corporate misconduct have come under scrutiny in a parliamentary inquiry led by Liberal senator Andrew Bragg.
Mr Bragg called ASIC an “inept corporate regulator” that had done a “very poor job of prosecuting people who are breaking our laws”.
In a statement this month, he said there had been a “significant decrease” in the number of cases being referred to the CDPP by ASIC.
“In the FY2018-19, ASIC made 86 referrals, compared to 41 referrals in FY2022-23. So far for the current financial year, ASIC has only made 2 referrals,” he said.
“These figures signal that ASIC has made Australia a haven for white-collar crime. ASIC has given up on their sole obligation to enforce corporate law.”
Last week, an ASIC spokesperson admitted to the ABC that no criminal or civil action had ever been taken against a builder or construction company director over insolvent trading.
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