Misconduct within a company when an insolvency practitioner has been appointed

What is misconduct within a company?

Misconduct within a company occurs when a director or company officer breaches their duties to the company. The persons involved may also include people who are not formally directors or other company officers, sometimes referred to as 'shadow directors'.

Breaches of duties could relate to:

  • unauthorised use of company funds or property
  • failing to keep proper company books and records
  • falsifying or destroying company books and records, or
  • illegally transferring company property to another company in circumstances where the transfer was not in the best interests of the company (for example, where nothing was given in return for the transfer).

What you should do

Find out who the insolvency practitioner is

Search for the company name on ASIC’s Insolvency Notices. This will list who the insolvency practitioner is and if there are insolvency notices lodged about the company by an insolvency practitioner, such as notices of creditor meetings.

Contact the insolvency practitioner

Report your concerns to the insolvency practitioner, as they are best placed to investigate them. Insolvency practitioners are required under law to report to ASIC any offences they discover during their investigation.

ASIC and misconduct within a company

We do not generally get involved in reports of alleged misconduct within a company after an insolvency practitioner’s appointment to the company, until we receive a report of misconduct from an insolvency practitioner.

The insolvency practitioner must report to ASIC if they suspect that anyone connected to the company that is under external administration may have committed an offence. These reports are not available to members of the public.

We will only take action on those reports where there is sufficient evidence and our action will result in a greater regulatory impact in the market and benefit the general public more broadly.

Any action we take, based on reports from insolvency practitioners, will generally aim to punish misconduct or ban directors from managing companies.

Concerns about the conduct of an insolvency practitioner

If you are concerned about the conduct of an insolvency practitioner, see Insolvency practitioners on our 'How to complain' webpage.

Where can I get more information?

Download this information sheet as a PDF (92KB)

This is Information Sheet 175 (INFO 175), issued in July 2013. Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance.

Whistleblowing

Guidance for company officers and company auditors on the whistleblower protection regime

30 June 2020

Information sheets to help companies, company officers and company auditors understand and comply with their whistleblower protection obligations

Whistleblower protections

Answers to common questions on the rights and protections for whistleblowers

Business ethics: New challenges, better theories, practical solutions
A speech by ASIC Commissioner John Price, 9 December 2019. John discusses the important role whistleblowing can play in fostering an ethical culture for business.

ASIC gives guidance on companies’ whistleblower policies and relief to small not-for-profits
Media release 19-308MR. 13 November 2019

Whistleblower protections for not-for-profit organisations, 29 May 2019

 


Whistleblowers and the Corporations Act

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ASIC Executive Director Warren Day talks about whistleblowers and the important role they play in identifying and calling out misconduct and harm to consumers and the community.

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Fair Work Ombudsman

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Last updated: 23/03/2016 03:08