Liquidators – in defence of ASIC’s supervision
ASIC has copped some stick regarding its supervision of liquidators during the last year or two. And yes, there are some bad apples involved in acts ranging from fraud (thank you Stuart Ariff) to overcharging. But not all liquidators are bad – most of us are quite decent! The most common complaint against liquidators is overcharging and at Dissolve we are trying to move those goal post as we do the vast majority of our liquidations at a fixed fee (yes, really).
But I actually want to say a good word for the Regulator and its supervision of liquidators – ASIC really is quite active in supervising the insolvency profession. Below is a long list of the care and attention us liquidators receive from ASIC.
ASIC does publish its activities in supervising liquidators, but most of what it does is not widely known. So that you can put the information in context, there are around 700 Registered Liquidators and about 10,000 company insolvencies a year. So here are some of ASIC’s activities in FY2011 and in the last few months:
- In August 2011 one Official Liquidator’s registration was cancelled and another gave extensive undertakings as a result of their failure to disclose conflicts of interest;
- In July 2011 a Registered Liquidator’s registration was cancelled for failure to lodge an annual statement;
- In February 2011 a Registered Liquidator voluntarily resigned from all of his appointments following an ASIC enquiry;
- In August 2011 a Registered Liquidator’s registration was cancelled for failure to maintain professional indemnity insurance;
- ASIC conducted a review of 199 Registered Liquidators to review circumstances where they had not completed a Section 533 Report (that’s an “offences” report to ASIC by the liquidator);
- ASIC reviewed the Independence Declarations by 173 Registered Liquidators for compliance with professional standards;
- ASIC reviewed the Professional Indemnity Insurance of 666 Liquidators for compliance with standards;
- ASIC undertook 20 insolvency practice reviews involving 215 seperate administrations (so about 2% of all) examining independence, remuneration, processes and reporting;
- ASIC recently commenced a Remuneration Monitoring Project that is continuing;
So in any given year most insolvency practitioners will have ASIC checking up on them at least once and possibly four times. And in addition, some liquidators (me included) are members of the Insolvency Practitioners Association and an Accounting Body each of which have their own standards and conduct their own enquiries.
Quite a bit of supervision in my book.