ASIC Corporate Insolvency Update - Issue 24

Issue 24, June 2022

Ransomware attack impacting registered liquidators

We are aware of a recent ransomware attack on information and systems located in the cloud, resulting in significant disruption to several registered liquidators (RLs).

This incident highlights that neither the cloud environment, nor third-party vendors that provide cloud infrastructure and services, are immune to cyber attacks.

It is important for RLs to adequately assess both the benefits and risks associated with a move to the cloud environment, including the nature and type of providers, and the products and services they provide. RLs should consider whether they have adequate controls and contingency plans in place in the event of temporary or permanent disruptions. This is particularly important if business critical information and systems are housed in the cloud environment, such as client or sensitive commercial data, or general accounting and insolvency specific software packages.

The Australian Cyber Security Centre (ACSC) provides a range of resources that may assist RLs to make risk-informed decisions and arrangements related to the cloud environment, such as the ACSC’s cloud security guidance.
Further, to protect your business against potential cyber attacks, RLs should also consider:
  • What business critical information and systems are hosted by my cloud service provider?
  • What is the impact to my business operations if I am unable to access that information and those systems?
  • Do I have an incident response and recovery plan that will enable me to operate outside of the cloud, should cloud network access be disrupted?
  • Have I made inquiries about my cloud service provider, and understood their process for backing up my data?
  • Do I have a plan for long-term recovery should my data be unable to be restored?
The ACSC and other international agencies have recently issued an advisory, warning about an expected increase in malicious cyber activity targeting managed service providers (MSPs). The advisory is specifically tailored for MSPs and their customers, which may include cloud-related services, but does not address guidance on cloud service providers. We urge RLs who use MSPs to familiarise themselves with the advisory, which serves as a timely reminder of the need to be vigilant against threats associated with the digital supply chain.
We thank those RLs who proactively advised ASIC of this incident. It enables us to:
  • engage and assist where possible
  • understand the issues affecting you and your practice
  • facilitate timely communication broadcasts to heighten awareness of threats
  • assist RLs and their firms to consider preventative and recovery measures in place; and their plans for when (rather than if) a cyber attack occurs.
Below are links to recent ASIC publications. We ask RLs to continue to inform us if there are cyber incidents impacting their practice, by emailing the Registered Liquidator team contact.   
For more information and other useful resources visit the ACSC or ASIC’s cyber resilience webpage. We continue to encourage you to subscribe to the ACSC alert service to receive the latest alerts as they are published, and regularly review advisories.

When ASIC rejects Assetless Administration Fund applications for lack of regulatory benefit

What does it mean when we reject your Assetless Administration Fund (AAF) application for reasons which include a ‘lack of regulatory benefit’?

It means that we have determined that funding the matter will not result in, or beneficially contribute to, an effective regulatory outcome. This is articulated in the AAF guidelines by reference to strategic significance, the benefits of pursuing misconduct, and alternatives available with particular reference to Information Sheet 151 ASIC’s approach to enforcement

The following are examples of ‘lack of regulatory benefit’:

  • ASIC intends to take other action regarding the persons of interest and we are unable to disclose this to you.
  • Another agency may be taking, or intending to take, enforcement action or pursuing the misconduct identified and we cannot disclose this to you.
  • The misconduct identified would be better addressed by another agency.
  • We consider enforcement action is unlikely to deter actual or future misconduct or reduce the risk of harm to the public.
  • Funding a public examination is not likely to lead to ASIC commencing a formal investigation after the supplementary report is received or at any time in the future.

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Requests for further information post-preparation of a director banning report

We will request additional information in relation to a director banning report to support a disqualification decision where evidence is not provided in the report.

Under subsection 206F(1)(b) of the Corporations Act 2001 (Cth) (Corporations Act), a disqualification decision requires:

  1. ASIC to issue a notice requiring the director to demonstrate why they should not be disqualified
  2. the director be given an opportunity to be heard.

Below are some common reasons ASIC makes further enquiries about a report so that it supports disqualification:

  1. A registered liquidator asserting that a failure to comply with s286 of the Corporations Act is a basis to conclude that the company traded whilst insolvent, when ’presumption of insolvency’ in s588E of the Corporations Act does not apply in making decisions pursuant to s206F of the Corporations Act (but could otherwise be a breach of s344 of the Corporations Act).
  2. Failing to identify adequate insolvency indicators, provide supporting evidence when alleging insolvent trading, or quantify the insolvent trading claim so that ASIC can demonstrate harm to the public in reaching its decision.
  3. Failing to provide adequate evidence supporting:
    1. transactions that give rise to offending under the Corporations Act
    2. failure to comply with statutory obligations or provide a copy of the ATO’s proof of debt and schedule of returns not lodged;
  1. Failing to adequately demonstrate management or control that would classify a person as a shadow or de facto director. For example, a person being an authority on a company account is not itself evidence of management or control. That person must have authority to transact on a company account and have used that authority to enter into significant, or substantially recurring transactions.

Please consider the above when submitting director banning reports to avoid requests for additional information.

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New resources to assist in Assetless Administration Fund applications

To ensure your Assetless Administration Fund (AAF) application has all the information we need, remember to consider the following guides:

  • Grant guidelines – this helps you understand whether you meet the criteria to apply for funding under the relevant grant opportunity (e.g. Matters Other than Director Banning, Director Banning or Liquidator Recovery Action).
  • Substantiation guide – this assists you with recognising and understanding the types of information, supporting document and evidence to consider when investigating alleged misconduct.

We have developed a new user guide for applying for AAF grants through the ASIC Regulatory Portal. We consulted with a number of registered liquidators as we developed the guide and would like to thank those who participated and provided us with their valuable insights.

This is the first of three guides which will be published to explain how to submit an AAF application through the ASIC Regulatory Portal.

Applications that did not take the above guides into consideration are often incomplete or unclear. This will cause unnecessary additional time to be spent by you, your staff and us.

To access the above resources, see our Assetless Administration Fund page.

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Importance of engaging with the company director(s)

It is not appropriate for registered liquidators (RLs) to deal exclusively with third parties, in particular pre-insolvency advisers (usually where the adviser is also the referrer), to obtain information about a company. In some cases, RLs have no contact with the directors, as requests for information and records are only sent to the pre-insolvency adviser, who then deals with the director. 

Pre-insolvency advisers commonly act for the directors and some of the information they provide to RLs about a company can be filtered or incomplete.

We expect RLs, where a pre-insolvency adviser is involved, to:

  1. deal directly with the directors (and former officers), for example, meet with them (without the pre-insolvency adviser present) to understand the company’s financial affairs leading up to external administration and available company source records
  2. scrutinise the role of the pre-insolvency adviser, by undertaking adequate investigations, including:
    1. asking the directors what advice and assistance they received from the pre-insolvency adviser
    2. asking the pre-insolvency adviser to deliver up their client’s file
    3. asking about assets disposed of, or transactions entered into, on the pre-insolvency adviser’s suggestion.

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Regional liaison meeting membership

We hold regional liaison meetings (RLMs) with registered liquidators (RLs), lawyers and others within the insolvency profession biannually.

The RLM seeks engagement from practitioners across a range of factors including firm size and location. We periodically ask existing members to retire to enable others in the insolvency sector an opportunity to participate.

Members of the RLM are expected to actively contribute to discussions and attend at least one meeting each year, nominating an alternative with similar skills and experience if they cannot attend.

Email to be considered for any RLM vacancies. Your expression of interest should also include a brief description detailing why you would like to be involved.

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Wellbeing engagement with registered liquidators

We have actively reached out to registered liquidators (RLs) to discuss issues affecting them due to COVID-19 and the current insolvency landscape by:

  • hosting two state-based virtual meetings in New South Wales and Victoria in August 2021
  • holding a similar meeting for RLs based in South Australia, Western Australia, Queensland, Tasmania, the Australian Capital Territory and Northern Territory in March 2022
  • speaking to 13 randomly selected individual RLs across five states during February and March this year.

While the situation is ever changing, key themes from engagement conversations included:

  • concerns over certainty of workflow
  • staffing (when some staff have left the industry or been made redundant)
  • difficulties faced with attracting staff.

With insolvency statistics suggesting an increase in appointments, RLs must consider their firm’s capacity when taking on new appointments.

RL welfare is a key issue for ASIC. Contact your Registered Liquidator team contact in your state if you wish to discuss any welfare issues.

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Outstanding supplementary report requests

We encourage registered liquidators (RLs) to take steps to review any outstanding supplementary report requests from ASIC. We continually monitor requests and will contact RLs directly where a request to submit a supplementary report remains outstanding. 

As identified in Issue 21, RLs have three options when ASIC requests a supplementary report:

  • Option 1 – complete the report: A supplementary report detailing the alleged misconduct and all current evidence in support.
  • Option 2 – apply for funding: If eligible, a timely funding application to ASIC’s Assetless Administration Fund, please see our guidelines.
  • Option 3 – request not to lodge a report: A ‘Notice of intention not to lodge an insolvency supplementary report’. Please note that you are required to give reasons for not lodging the supplementary report.

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Media releases

Below are our most recent media releases relating to corporate insolvency:

22-137MR ASIC disqualifies New South Wales recruitment director for five years

22-136MR ASIC disqualifies former Strategic Alliance group director for three years

22-129MR ASIC succeeds in application to appoint provisional liquidators to Ascent Investment and Coaching Pty Ltd

22-126MR Former Victorian catering company director charged with breaching directors’ duties

22-119MR Former Queensland company director sentenced for breaching directors’ duties

22-114MR Former Chair, CEO and CFO of Bruck Textile Technologies charged with preventing recovery of employee entitlements

22-108MR ASIC disqualifies Queensland building and construction industry director for three years

22-107MR Tasmanian director disqualified from managing corporations for five years after engaging in illegal phoenix activity

22-099MR ASIC disqualifies former Steller Group director Simon Pitard

22-098MR ASIC disqualifies former Steller Group director James O’Donahue

22-096MR ASIC disqualifies former hospitality industry director for two years after breaching directors’ duties

22-095MR ASIC disqualifies former West Australian construction and trade industry director for four and a half years

22-076MR NSW director disqualified from managing corporations for five years after engaging in illegal phoenix activity

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Insolvency statistics

ASIC publishes weekly statistics about companies entering external administration and controller appointments (Series 1B) and about all external administration and controller appointments (Series 2B).

Twelve-month rolling average 

The 12-month rolling average to 29 May 2022 is up 15.2% on the previous year and down 39.8% on the baseline measure (see Series 1B).  

Financial year to date 

Companies entering external administration for the financial year to date to 29 May 2022 is up 14.6% for the same period for the previous financial year but still down 39.9% against the equivalent baseline measure (see Series 1B).

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Email support

Law reform

Published notices

Legal notification


Requests for assistance external administration

IFM (General)

IFM metrics for RLs

ASIC as a creditor

Comments/feedback on this newsletter

Registered liquidator queries (matters other than specified above)

Request for publicly available data (for a fee)

Assetless Administration Fund

Creditor-Defeating Disposition applications

Note: The RL Legal email is for notification of court proceedings required to be served on ASIC under the court rules and eligible applicant requests only.

Registered Liquidators team contact

Victoria & Tasmania

Nisansala Peries (Accountant)


Direct: (03) 9280 4149

New South Wales & ACT

Carl Sibilia (Snr Manager)


Direct: (02) 9911 2994


Adrian Furby (Snr Specialist)


Direct: (07) 3867 4840

Western Australia

Adrian Saggers (Snr Manager)


Direct: (08) 9261 4065

South Australia & NT

Hywel Thomas (Snr Accountant)


Direct: (08) 8202 8573  

Assetless Administration Funding (for matters other than director banning)

David Rose (Snr Manager)


Direct (03) 9280 3291

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Last updated: 30/06/2022 09:47