We don’t know if it’s a testament to the generally high standards maintained by Australian liquidators or an indictment of ASIC’s stretched enforcement capability but up until last month there hadn’t been a referral to a disciplinary committee under section 40-50 of Schedule 2 to the Corporations Act in almost four years.
The last time a Committee was convened to deliberate on a practitioner’s conduct its subsequent decision to cancel Robert Auricht’s registration was moderated to a five year suspension after the South Australian sought a less draconian sanction via the Administrative Review Tribunal (ART).
ASIC zeroed in on Auricht in 2022, referring him to a committee in December of that year after learning he’d been paying himself remuneration without approval and operating without staff. It took almost four more years for Auricht to get his review from the ART.
In the meantime whatever other conduct matters ASIC might have had in that period were dealt with under the counter.
That dormancy ended last month however with the referral of PKF partner Simon Thorn. ASIC alleges unspecified breaches of s40-40(1)(l).
In English that means “the liquidator has failed to carry out adequately and properly (whether in Australia or in an external Territory or in a foreign country): (i) the duties of a liquidator; or (ii) any other duties or functions that a registered liquidator is required to carry out under a law of the Commonwealth or of a State or Territory, or the general law”.
Predictably the regulator provided no specifics. It never does prior to a committee making its determination and only then if the committee, which we must remember is always chaired by an ASIC delegate, chooses to recommend that ASIC publish the committee’s decision and reasons. It’s reassuring to know ASIC has a sense of humour.
Less predictable was Thorn’s preparedness when contacted yesterday to confirm what iNO suspected.
That ASIC had issued Thorn with a Show Cause Notice in the wake of the fallout following his appointment as administrator of Premier Energy Resources (PER) in June 2023.
iNO readers may recall that towards the end of 2023 we reported on the judgment of NSW Supreme Court judge Kate Williams In the matter of Premier Energy Resources Pty Ltd [2023] NSWSC 1185.
It turned out that after Thorn had been appointed by PER director Luke Connor he was approached by shareholder Richard Clark.
Clark told Thorn that a form lodged with ASIC announcing his retirement as a director of PER just prior to Connor passing a resolution as sole director to place the company into VA was fraudulent.
Clark said the signature on the form was a forgery, he regarded himself as still in office and the company as solvent.
Unfortunately for Thorn Judge Williams refused his subsequent application to regularise his appointment on the basis it would de facto endorse Connor’s deceit.
“In my opinion, an order validating the appointment of Mr Thorn would give the imprimatur of the Court to the conduct of Mr Connor in forging or procuring the forgery of Mr Clark’s signature on the letter of resignation, and to the unsatisfactory conduct of Mr Thorn in failing to investigate and promptly bring to the Court the doubts raised about the validity of his appointment, the judge said.”
Thorn subsequently referred the job to fellow Novocastrian Paul Gidley and after period in liquidation Gidley was appointed administrator to enable a Deed of Company Arrangement (DoCA) to be proposed. By 2025 the DoCA was fully effectuated.
If only disciplinary referrals could be resolved as quickly.
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