The Australian Securities and Investments Commission (ASIC) announced last week that it had successfully prosecuted 86 company officers during the past three months, with 23 prosecutions of Western Australians.
ASIC executive director of consumer protection Greg Tanzer told WA Business News the prosecutions mainly focused on bankrupts and other people disqualified from managing companies. Also prosecuted were company officers who failed to assist liquidators and administrators in the administration of their failed companies, and those who failed to produce or keep proper books and records.
Bankrupts and people found guilty of fraud or dishonesty offences cannot act as a company officer for five years.
“The failure of small companies, and their directors, to comply with basic requirements harms creditors and consumers and makes it difficult for company liquidators to recover property for creditors,” Mr Tanzer said.
“At the moment we also have a particular emphasis on people failing to update registers when they change their address; it’s a mistake that could be honestly made, so first we write a letter, and if there is no response we prosecute because often people use this as a way of avoiding creditors.
“We will continue to take action against people who fail to assist liquidators and who can’t act on companies; this is an important part of the Corporations Law and has a significant impact on creditors.”
He said people breached the law both deliberately and unknowingly. ASIC first tried to contact people to resolve the issue, and would prosecute if there were no response.
“These requirements are important and necessary to protect the interests of individuals, small businesses and creditors,” Mr Tanzer said.
“The failure of directors to fulfil their responsibilities generally hurts creditors that have dealt with the company, which is why we pursue company directors who don’t do the right thing.
“ASIC will take action against company officers who hamper the role of a liquidator in assessing how much the failed company might be able to return to creditors.
“Where company officers are uncooperative and refuse to provide information on the company’s finances and history, ASIC will step in and take whatever action is necessary.”
ASIC investigations originate through public complaints as well as ASIC offices, and Mr Tanner said ASIC relied heavily on information provided by the public.
