Is ASIC finally getting a few teeth?

ASIC has often been described as a toothless tiger. Business people who have been victims of phoenix companies or companies that fail because of poor management are often furious to discover that no action was taken against the perpetrators.

ASIC has often been described as a toothless tiger. Business people who have been victims of phoenix companies or companies that fail because of poor management are often furious to discover that no action was taken against the perpetrators.

But ASIC claims that its record is getting better, and it says a new scheme introduced two years ago is helping.

In the 2007-08 financial year, ASIC disqualified 52 directors from managing corporations for periods totalling 175 years. ASIC says its ability to tackle misconduct arising from company failures has been helped by the introduction of the Assetless Administration Fund.

This scheme allows ASIC to fund preliminary investigations by liquidators into the failure of a company with little or no assets. Liquidators can then prepare reports for ASIC that can identify the misconduct and then allows ASIC to disqualify directors who fail to act in the best interests of companies, creditors and employees.

ASIC can disqualify a person from managing corporations for up to five years if a person has been a director of two or more failed corporations within seven years and their liquidator has lodged a report with ASIC about the corporation’s inability to pay its debt.

Disqualifications for June included:

Brian Kendall Williams of Newtown, Queensland. He lent his name as a director of two companies that failed, Spectre Trading and Premium Strategies. He also opened a bank account, signed blank cheques and did not seem to have any active involvement in the companies or know much about them, ASIC claims.

Jon Ian Gisler and Ian Edward Gisler were disqualified for not maintaining proper financial records, allowed their companies Gislers Enterprises and Gisgroup Investments to incur debts when insolvent, and failed to provide liquidators with a report into the affairs of Gislers Enterprises.

Architect Denis Millins of Taringa Queensland was disqualified for failing to maintain proper financial records and failed to prevent company DM Consulting incurring a debt, despite knowing the company was insolvent.

Read more about insolvencies