ASIC flexed its regulatory muscles this week by announcing the appointment of liquidators to 13 abandoned companies to help employees gain access to the Fair Entitlements Guarantee scheme (FEG).
In a statement, the corporate watchdog said the appointment of liquidators, including Deloitte and PwC, also facilitates a full and proper investigation into the reasons why the companies failed, and allows recovery of any voidable or unreasonable director-related transactions.
“The 13 abandoned companies owe at least 27 employees a total in excess of $556,000 in employee entitlements,” ASIC said.
Mid-tier firms Bentleys and Pitcher Partners saw the lion’s share of the activity, winding up three companies apiece between 11 April and 7 July 2016.
The following companies were wound up over the period: Trident Australasia Pty Ltd (Jason Tracy of Deloitte), Koko Hair Qld Pty Ltd (Derrick Vickers and Darryl Kirk of PwC), Box Stallion Pty Ltd (Gary Fettes of Rodgers Reidy), Meats International Co Pty Ltd (Hugh Armenis of Bentleys), Sanai Trading Australia Pty Ltd (Hugh Armenis of Bentleys), Atlantis Farm Pty Ltd (Hugh Armenis of Bentleys), The Labour Barn Pty Ltd (Leigh Prior of Pitcher Partners), Myclub Holdings Pty Ltd (Gary Fettes of Rodgers Reidy), Astra Manufacturing Pty Ltd (Jon Howarth of AS Advisory), Dunea Group Pty Ltd (Leigh Prior of Pitcher Partners), RTO Qld Pty Ltd (Richard Hughes of Deloitte), Z Force Industrial Pty Ltd (Anne Meagher of SV Partners) and Watershed NT Pty Ltd (Leigh Prior of Pitcher Partners).
The FEG is a legislative safety net scheme funded by the Australian government. It is designed to assist employees to recover unpaid entitlements after their employer company’s liquidation or bankruptcy.
“Some employees owed entitlements cannot access FEG because the companies’ directors are either unable to discharge their duties or abandoned their insolvent companies without putting them into liquidation,” ASIC said.
The regulator’s appointment of liquidators facilitates access to FEG for these employees. ASIC first used its powers in 2013 and to date has wound up 84 companies that owed a total of 258 employees more than $4.4 million in entitlements.