ASIC has exercised its wind up powers to appoint liquidators to nine abandoned companies to assist employees of these companies to gain access to the Fair Entitlements Guarantee scheme (FEG).

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.

ASIC has now used its wind up powers in 2014 to appoint liquidators to 32 companies that owed a total of 99 employees more than $1.4 million in entitlements. (refer: 14-097MR and 14-210MR)

The latest abandoned companies owe at least 30 employees a total in excess of $310,000 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.

However, 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).

Editor's note 1:

On 18 April 2016, ASIC issued 16-117MR, noting that two further companies were wound up between June and September 2014 that did not appear in the list above. They are: