The regulator has released the ASIC regulation of registered liquidators: January to December 2014 report, detailing the supervisory, enforcement, stakeholder liaison and educative work undertaken by ASIC in the regulation of the insolvency and restructuring sector.
The report shows ASIC received a total of 384 reports of alleged misconduct involving registered liquidators throughout 2014.
According to ASIC, the outcome of the inquiries and reports of alleged misconduct showed that:
• "in 69 matters (20 per cent), legitimate conduct concerns existed and the matter was referred internally for further review — primarily by our Insolvency Practitioners team, or to another team within ASIC to support an existing surveillance or enforcement action;
• in 207 matters (59 per cent), there was insufficient evidence of an offence, or the registered liquidator did not breach the Corporations Act, and/or ASIC assisted to resolve the inquiry. We did not pursue the matter further; and
• in 77 matters (22 per cent), we took no action for reasons including that the matter did not advance or support an existing investigation or regulatory action."
Fourteen formal investigations or enforcement actions commenced during the year, and in total, 22 matters remained open at 31 December 2014.
ASIC said the 14 matters referred for formal investigation or enforcement action during 2014 arose from four proactive practice reviews, eight transaction reviews and two other referrals.
The 22 open matters at 31 December 2014 relate to 21 registered liquidators, with one having multiple matters.
ASIC commissioner John Price said that while a majority of liquidators do the right thing, ASIC continues to monitor the industry closely to identify those few who do operate outside of the law.
“ASIC works closely with registered liquidators when companies fail; particularly through ASIC’s administration of the Assetless Administration Fund, the Liquidator Assistance Program and enforcement action against directors and others based on registered liquidator reports to ASIC.
“However, as our report highlights, ASIC also seeks sanctions against those liquidators who don’t meet the high standards that the law imposes,” he said. “We anticipate continuing our strong enforcement focus on those few practitioners who flout the law.
“We will also continue our programs aimed at supervising the majority who do the right thing so people can have trust and confidence in the profession,” Mr Price said.
As at 31 December 2014, there were 705 registered liquidators in Australia.
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