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Thursday 17 October 2013

13-277MR ASIC reports on corporate insolvencies 2012–2013

ASIC today published an annual overview of corporate insolvencies based on statutory reports lodged by external administrators for the 2012–13 financial year.

Report 372 Insolvency statistics: External administrators’ reports (July 2012 to June 2013) (REP 372) provides an insight around the 9,254 reports received.

Profile of insolvent companies

REP 372 includes information about the profile of companies placed into external administration including:

  • industry types
  • employee numbers
  • causes of company failure
  • estimated number and value of a company’s unsecured creditor debts, and
  • estimated dividends to unsecured creditors.

Key data from the report is included in an attachment below.

REP 372 shows small to medium size corporate insolvencies again dominated external administrators’ reports. Of note, 85% had assets of $100,000 or less, 81% had less than 20 employees and 43% had liabilities of $250,000 (or less).

Ninety-seven per cent of creditors in this group received between 0–11 cents in the dollar, reflecting the asset/liability profile of small to medium size corporate insolvencies.

Reported misconduct

External administrators’ reports provide ASIC with important intelligence and, if received in a timely manner, can alert ASIC to possible misconduct.

REP 372 details how often external administrators report misconduct by company officers and the types of alleged misconduct most frequently reported.

ASIC also asked external administrators to prepare 677 supplementary reports where external administrators alleged company officer misconduct. This accounted for 10% of the 6,761 reports that were lodged in the 2012–13 financial year.

Supplementary reports are typically detailed, free-format reports, which set out the results of the external administrator’s inquiries and the evidence they have to support any alleged offences. Generally, ASIC can determine whether to commence a formal investigation on the basis of a supplementary report. In both 2011–12 and 2012–13, after assessment, ASIC referred 29% and 25% of these cases respectively for investigation or surveillance.

ASIC considers a range of factors when deciding to investigate and possibly take enforcement action and this is detailed in Information Sheet 151 ASIC’s approach to enforcement (INFO 151).

Monthly insolvency statistics

ASIC also today released its insolvency statistics for July and August 2013. For the first time ASIC’s monthly insolvency statistics reporting provides analysis by industry on companies entering into external administration.

The top six industries are below:

IndustryJuly 2013August 2013
Construction 179 166
Accommodation and food services 80 77
Retail 73 80
Manufacturing 63 39
Transport and postal warehousing 48 42
Other business and personal services 266 310

Download the latest insolvency statistics

Background

REP 372 is ASIC’s third annual report and fifth report since external administrators’ reports could be lodged electronically. ASIC’s previous reports are:

  • REP 297 (refer: 12-218MR) – Annual statistics for 2011-2012
  • REP 263 (refer: 11-263MR) – Annual statistics for 2010-2011
  • REP 225 (refer: 10-277AD) – Triennial statistics for 2007-2010
  • REP 132 (refer: 08-133) – Triennial statistics for 2004-2007

Download REP 372

Comparison of statistics over 2010–11, 2011–12 and 2012–13 appear in the attachment to this release

Last updated: 17/10/2013 12:00