ASIC has exercised its wind up powers appointing liquidators to nine abandoned companies to assist employees gain access to the Fair Entitlements Guarantee scheme (FEG). The companies were wound up between October 2015 and March 2016

The appointment of liquidators also facilitates a full and proper investigation into the reasons why the companies failed and allows recovery of any voidable or unreasonable director-related transactions.

The nine abandoned companies owe at least 28 employees a total in excess of $890,000 in employee entitlements. The companies are:

Background

The FEG is a legislative safety net scheme funded by the Australian Government. It is designed to assist employees owed unpaid employee entitlements because of their employer company’s liquidation or the company directors’ bankruptcy. In addition, the Department of Employment operates the 'Fair Entitlements Guarantee Recovery Programme', a programme designed to strengthen recovery activity of amounts advanced under the FEG Scheme.

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Some employees owed entitlements cannot access FEG because the companies’ directors are either unable to discharge their duties or abandoned their insolvent companies without putting them into liquidation. ASIC’s appointment of liquidators facilitates access to FEG for these employees. ASIC first used its powers in 2013 (refer: 13-233MR) and to date has wound up 71 companies that owed a total of 231 employees more than $3.9 million in entitlements.

Between June and September 2014, ASIC also wound up the following two companies (which did not appear in the previously issued media release):