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ASIC has taken action against a fifth liquidator in the course of one week, accepting an enforceable undertaking from a Sydney-based registered liquidator.
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ASIC continues liquidator crackdown
24 December 2015
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8 minute read
The regulator accepted the EU from Sydney-based registered liquidator Adam Edward Patrick Farnsworth, after a review of several external administrations found he had failed to adequately discharge his duties in that he:
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• Failed to recognise a relatively large value of referrals to him from one work referrer might lead to concerns about his independence and impartiality – he should not have accepted those appointments;
• Failed to make reasonable efforts to obtain the books and records of companies he externally administered as liquidator;
• Did not undertake investigations to the standard expected of a reasonably competent liquidator;
• Failed to highlight in a report to creditors, to the standard expected of a reasonably competent liquidator, that a person who referred work to Mr Farnsworth may have benefited from a voidable transaction
• Should not have admitted various related-party proofs of debt for voting purposes; and
• Did not document his adjudication of proofs of debt for distribution purposes.
ASIC noted that not each and every one of the views applies to all of the external administrations reviewed.
The undertaking prevents Mr Farnsworth from practising as a registered liquidator for the next six months, except on the liquidation of Moore Australasia Pty Limited (In Liquidation).
ASIC noted that it has taken into account the fact that, since mid-April 2015, Mr Farnsworth has not accepted any appointments as a registered liquidator. The regulator also noted that following their intervention, Mr Farnsworth took steps to update his compliance procedures and complete the ARITA independence training course.
“Registered liquidators must be, and must be seen to be, independent and impartial,” said ASIC Commissioner John Price.
“It is critical that creditors and the wider public have absolute confidence in liquidators acting, and being seen to act, independently and solely in the creditors’ interests.”
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