Bill Express mess drags on

It is almost three years since the collapse of Bill Express, but there is no sign that the sorry scandal will finish any time soon.

Yesterday, the Australian Securities and Investment Commission banned Ian Christiansen, the founder of Bill Express and a labyrinth of related companies from managing a corporation for five years, after finding he allowed the business to trade while insolvent between May 2008 and July 2008, just before the business fell over with total debts of more than $330 million.

This is part of an attempt by the regulator to unravel exactly what went wrong at Bill Express, which was once enough of a market darling that it attracted the likes of Gerry Harvey and Lindsay Fox as investors.

The idea behind Bill Express was actually pretty simple. The company provided payment solutions for hundreds of firms – including utilities and telcos – and had built a network of 14,000 terminals where consumers could pay their bills. Around 3,500 newsagents were in the network, as well as big supermarket chains.

For every transaction, Bill Express got a small cut.

But beneath the simple idea was a shockingly complicated business structure, built on personal relationships between key executives and directors. A web of related companies and subsidiaries was used to make its financial results look far better than they actually were.

The structure has clearly made it hard for ASIC to figure out exactly what went wrong and how. The long-overdue banning of Christiansen is simply one of many steps in the process of bringing those responsible to justice.

Last July, former Macquarie Group adviser Newton Chan was sentenced to 20 months’ imprisonment after pleading guilty to eight counts of manipulating the price of Bill Express shares and one count of providing false or misleading information to ASIC.

And later this year, Bill Express’ former chief financial officer, Peter Couper, will face court over claims that he falsified the books of Bill Express on two occasions by instructing staff to “post accounting entries which each recorded a sale of $5.4 million of stock when there had been no such sales.”

The corporate watchdog also claims Couper instructed staff to post accounting entries which recorded the purchase of $1.875 million of stock when there had been no such purchase.

You might say that ASIC’s pursuit of this company so long after it collapsed is all a bit pointless. The money is gone and the damage has been done.

But this was a major listed company that was allowed to create a structure so murky that even some of our most astute investors were fooled.

We need to know how this was allowed to happen, and how it won’t be allowed to happen again.