Following an ASIC review of 60 external administrations of which Mr Turner was the appointed external administrator, ASIC formed the view that Mr Turner failed to properly carry out his duties as a liquidator.
ASIC detected the matter through its proactive liquidator compliance program which identifies issues concerning competence, independence and improper gain for further investigation and enforcement action, if required.
ASIC Senior Executive Leader – Insolvency Practitioners, Adrian Brown, said registered liquidators were important gatekeepers within the financial system who needed to take their responsibilities seriously.
‘Liquidators must ensure they act competently, and if that is found wanting, we will not hesitate to take action to protect the interests of creditors and the broader industry.’
‘Our proactive program of compliance visits for registered liquidators continues and we will take appropriate steps against those who don’t meet their obligations’, Mr Brown said.
The enforceable undertaking requires Mr Turner to:
- ask ASIC to cancel his registration as a liquidator within seven days of ASIC’s acceptance of the EU. Mr Turner has already complied with this requirement
- not ever re-apply for registration as a liquidator
- not ever perform any duty or function which requires the person performing the duty or function to be registered as a liquidator
- provide ASIC with documents and information from time to time for the purpose of assessing compliance with the terms of the EU.
ASIC is of the view that Mr Turner:
- failed significantly to comply with statutory reporting requirements and lodgements including:
- lodgement of six-monthly receipts and payments
- holding annual meetings of members and creditors or lodging a report with ASIC
- lodging reports of his investigations
- drawing up, signing and lodging minutes of meetings of creditors,
- failed to validly fix or determine remuneration
- failed to make a declaration of relevant relationships and declaration of indemnities
- used the firm’s trust account to bank receipts and make payments for external administrations
- failed to have adequate human resources to properly service his appointments
- failed to have appropriate operational procedures and manuals for conducting external administrations, and
- unnecessarily delayed finalising external administrations.
ASIC does not hold the above views for each and every one of the 60 external administrations involved.
Mr Turner acknowledged that ASIC’s views are reasonably held. In doing so, Mr Turner agreed that he failed to carry out or perform adequately and properly the duties of a liquidator.
ASIC will make an application to the NSW Supreme Court for a new liquidator to be appointed to nine of the 60 external administrations reviewed. The new liquidator will be required to finalise those external administrations. The remaining 51 external administrations have been inactive for over two years, and ASIC is taking steps to finalise those external administrations by deregistering those companies on the basis there is no acting liquidator.