iscover ‘Entitled to the amount overdrawn’: CA ANZ censures SA liquidator, issuing $10k fine after he made unauthorised fund drawings by ‘mistake’
BusinessThe CA ANZ Professional Conduct Committee (PCC) has proposed that a liquidator enter a consent order agreement after finding that he made multiple unauthorised drawings from a company and failed to keep proper accounting records.
A South Australian liquidator has been censured by Chartered Accountants Australia and New Zealand (CA ANZ), made to pay a $10,000 fine, $219 for investigation costs, and to undertake a CA ethics short course after the accounting body found that he had drawn remuneration without approval and “failed to carry out adequately and properly his duties as a liquidator”.
The Administrative Review Tribunal determined that while Richard Auricht’s withdrawal of funds was neither dishonest nor deliberate, it “arose from mistake rather than deception”.
Despite this, the tribunal found that Auricht’s breaches were numerous and occurred over an extended period, and the amounts involved were significant.
Under the terms of the consent order agreement, the CA ANZ Professional Conduct Committee (PCC) determined that the liquidator “failed to carry out adequately and properly his duties as a liquidator by drawing remuneration without creditor or court approval, was not lodging documents with ASIC and no longer had the required qualifications, experience, knowledge and abilities.”
Further, the Australian Securities and Investments Commission (ASIC) alleged that he failed to “follow proper processes around the drawing of his fees had the potential to bring the entire profession into disrepute and the requirement for registered liquidators to make lodgements across the course of an appointment helped to ensure the accountability and transparency of the liquidation process and allowed ASIC to perform its regulatory functions.”
Box of lost files
Following the tribunal’s determination earlier this year, the liquidator had his ASIC registration suspended for five years backdated from 23 June 2023.
During the hearing, the tribunal determined that Auricht’s payment accounting processes were inadequate.
The tribunal found that there was a lost box of files, and that there was no evidence indicating that Auricht made appropriate arrangements to keep the materials secure “nor is there any adequate explanation about why this situation was permitted to occur”.
“The fact there may have been other electronic copies does not excuse the failure to keep the hard copies secure,” it said.
“However, because the accounting procedures in place were inadequate, the Member [said that he] ‘didn’t realise completely that we’d overdrawn until… the reports for the final creditors meeting’,” the tribunal heard.
“Excusable” or “not serious”
In his submissions to the tribunal, Auricht said that his conduct was excusable or not serious, and that he was entitled to the amount overdrawn.
“This reflects a continuing lack of appreciation for his inappropriate conduct,” the tribunal said in its decision.
“It was not accepted that the failures of the Member arose from ‘unfortunate coincidences’ that were ‘beyond his control’,” the tribunal said
According to the Australian Restructuring Insolvency and Turnaround Association (ARITA) Code guidance, the liquidator is required to repay funds to the Company if an error was made resulting in him.
”For the reasons set out above, the Member does not meet the standard of fitness and propriety to hold the position of liquidator,” the PCC said.
The proposed consent order agreement will be entered on Auricht’s record.
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