I was privileged the other day to sit on a panel for the Australian Institute for Business and Economics at the UQ Business School Executive, with my fellow panelists: Tim Cole (AFSA), Matthew Broderick (HWL Ebsworth Lawyers) and Adrian Brown (ASIC).
The topic was on “untrustworthy advisors”, including illegal phoenix operators.
I had a great time talking about a bunch of issues that I am passionate about, including:
- brain drain – what is ASIC and the profession doing to stop the exodus of the next generation of liquidators? An over-regulated ILRA, mixed with the ASIC funding levy of between $15k and $100k per registered liquidator, can only be sending the wrong signal to my generation
- director identification numbers (“DIN’s”) – probably the most important reform to be proposed in insolvency for many years. Creating more transparency about the key decision makers of a company can’t come quick enough. Why should a director be able to register companies in multiple different aggregations of their name (eg Mat, Mathew, Matthew, M Hudson)
- more money and power to liquidators – the profession produces millions of hours of free investigative work for the government, which is becoming a real problem. Untrustworthy advisors know this, and are exploiting it.
- Why should a liquidator spend time investigating illegal phoenix activity if there are no assets and no material benefit to the body of creditors?
- Something similar to a 139ZQ notice in bankruptcy would do wonders for liquidators, because the current ability for liquidators to obtain books and records is cumbersome for small or no asset liquidations.
- To the Government you need to up the ante; the $millions you have set aside for the assetless administration fund that ASIC administers, needs to be $hundreds of millions. If illegal phoenixing is hurting the economy by as much as $5 billion (as some reports suggest), then imagine what a 5-10% spend could achieve to stop it?!
- trusts transparency – without a copy of the trust deed, it is nigh on impossible to know the beneficiaries or trustee of a trust. Forcing trusts to register their trust deed would go a long way
- cab rank appointments and a government liquidator – no! This proposal, which is backed by ASIC, is unnecessary and goes to the heart of their cultural problem with liquidators and my first point.
- small liquidations – an idea proposed long ago and backed by ARITA. It involves carving out many of the administrative burdens for liquidated companies that do not have many assets and don’t require excessive investigations. Great way to allow innovation in the profession!
These are just a few, but what other ideas do you support that can help?
With thanks to David Morrison (UQ) and Dr Garry Hamilton (Taylor David Lawyers) for putting on this event and inviting me along to present.