An ASIC surveillance program aimed at weeding out illegal phoenix operators has been widened to look at the use of false statutory declarations in Australia's building and construction sector.
Commissioner Greg Tanzer said ASIC's latest surveillance campaign follows feedback from small businesses, industry bodies and other government agencies about the use of false statutory declarations in the sector to falsely claim payments for work.
'There is concern that some company officers of larger companies have falsely declared that they have paid small businesses contracted to work on commercial and residential projects when this is not the case', Mr Tanzer said.
'Falsely declaring that you've paid a contractor has serious flow-on effects in the building and construction industry. Many contractors are small business operators who have operating expenses and debts to pay. When they are not paid for work undertaken it puts their businesses, livelihoods and creditors at risk'.
Mr Tanzer said the surveillance was also another important step in ASIC's work to combat illegal phoenix activity – the fraudulent act of transferring the assets of an indebted company into a new company to avoid paying creditors, tax or employee entitlements.
'While false statutory declarations and fraud matters are matters for other regulatory and enforcement agencies, company officers who knowingly make a false statement regarding payments to creditors may find themselves facing criminal or civil action by ASIC', Mr Tanzer said.
'Under the Corporations Act, ASIC can also take administrative action against company officers who engage in misconduct. In the last year, ASIC banned 60 directors who engaged in misconduct including phoenix activity.
'This campaign builds on ASIC's work to help small business owners protect themselves from unscrupulous operators. It also follows the release of our free smartphone app, ASIC Business Checks, which is a tool designed to help business owners undertake some practical and easy checks to verify information about businesses they're dealing with or potential business partners', Mr Tanzer said.
ASIC's surveillance will focus on eight major commercial and residential developments under construction across Australia.