During the CPA Australia fallout earlier this year, a group of 21 members who named themselves the Transition Strategy Team (TST) were advised that in accordance with the Corporations Act, the Court can appoint a provisional liquidator where directors have acted in their own interests, or where the affairs of a company are being conducted in a manner that is unfairly prejudicial to the interests of members.
Further, they found a court can appoint a provisional liquidator on what is known as the “just and equitable ground,” which is inclusive of a lack of confidence in the conduct and management of a company’s affairs, chair of the TST David Dahm told Accountants Daily.
The members mulled this option prior to the entire board resigning in late September with a view to shake up CPA Australia's constitution, not because they believed the association to be insolvent.
“In anticipation of the liquidator acting in the membership body's best interest, it was envisaged that the provisional liquidator would investigate past misconduct, amend the constitution to return the democratic process of electing directors to its members and then hand the company back to a new board, duly elected under a redrafted constitution,” the TST said in a recent statement.
“The board resignation had put an end to our application, however many of our concerns remain unanswered, so we continue to keep our options open,” he said.
The TST began formal contact with the CPA Australia board via a letter of demand on 28 July, requesting the board resign and calling for an EGM. The TST informed the board it would move to provisionally liquidate and appoint an administrator if their concerns weren’t addressed. A series of communications followed.
Accountants Daily understands several members of the new CPA Australia board have been in touch with the TST and engaged with them to resolve their concerns.
“We remain patient in waiting to see when the final old board members leave to witness the real change to occur in the new year. Seeing substance override form will define our next steps. Hopefully, no further action will be required. Time will tell,” the TST said.