In case you’ve missed it in the media, liquidators are bad (apparently). I’ve provided details in a previous blog about ASIC’s supervision of liquidators. I’ll disagree with the general proposition that liquidators are bad but there is a bad liquidator who has been brought down by ASIC and the Courts. Check out below the details on that guy and some other ASIC actions against liquidators.
The liquidator in the spotlight is, of course, Stuart Ariff. Late last year he was found guilty of 19 criminal charges and sentenced by the District Court to six years jail. The surprising aspect is that those charges related to a Members Voluntary Liquidation – so that is a winding-up of a solvent company. In most cases, there is no requirement that the liquidator of a solvent company be a registered liquidator – anyone can do it. But in any case, he was responsible for the return of capital to shareholders of H R Cook Pty Limited but managed to grab, unauthorised, about $1.8 million for himself on the way through.
We’ll see Stuart back on the streets sometime after March 2015. But he won’t be doing any more liquidations. He has previously been banned for life from acting as a liquidator as a result of fee gouging and other improper conduct in relation to 16 companies.
So what other actions has ASIC taken against Liquidators? Details for 2011 are:
- one Official Liquidator’s registration was cancelled;
- another Official Liquidator gave extensive undertakings as a result of their failure to disclose conflicts of interest;
- a Registered Liquidator’s registration was cancelled for failure to lodge an annual statement;
- a Registered Liquidator voluntarily resigned from all of his appointments following an ASIC enquiry;
- a Registered Liquidator’s registration was cancelled for failure to maintain professional indemnity insurance.
So that’s 5 of 670 Registered Liquidators. A bit under 1 % in a year. Hmm, not good.