South Australian liquidator Richard Auricht could be off to the Administrative Appeals Tribunal (AAT) after a Schedule 2 disciplinary committee ruled that his registration be cancelled.
In accordance with the committee’s ruling ASIC published the decision with reasons yesterday. See: https://download.asic.gov.au/media/gacn0ghu/20230626-richard-auricht-report-final.pdf
“It is not the basis upon which the fees were incurred, or the entitlement to being paid that ASIC believes makes Mr Auricht not fit and proper to be a liquidator, it is the drawing of the fees when they were not approved to be drawn.” Committee convened to make a disciplinary decision about Richard Ernest Auricht.
The committee, comprising ASIC delegate Sarah Thrift, ARITA nominee Robyn Erskine and Minister’s pick Steve Parbery found that Auricht wasn’t a fit and proper person to hold a liquidator’s registration after examining instances where Auricht had drawn remuneration without approval from creditors or a court, though it was accepted that this was inadvertent as opposed to intentional.
The administration and impugned conduct that apparently caught ASIC’s eye goes back to the period after 2013 when Auricht was appointed administrator of Ultimate Air Control Pty Ltd.
While the committee’s reasons don’t reveal exactly what brought the matter to ASIC’s attention they hint that Auricht was under investigation by the regulator in respect of matters not dealt with by this committee.
The reasons do show that ASIC wrote to Auricht in October 2021 setting out a discrepancy between fees drawn and fees approved that was apparent on documents ASIC had in its possession.
Auricht however was aware of it as early as May 2018 but didn’t repay the funds.
When the regulator asked for an explanation Auricht requested till January 2022 to respond but he never did and ASIC issued a concerns notice in August.
That appeared to prompt Auricht to apply to the courts for retrospective approval of the remuneration in November and after failing to satisfy ASIC’s concerns Auricht was referred to the committee in December.
The reasons show that after generating a reconciliation of the amounts drawn down the committee determined that between 2013 and 2017 Auricht drew down between $339,188.54 and $388,688.54 without the required approvals out of a total $887,302.75 in fees.
In his defence Auricht said that the administration was large and that at times his firm lacked the resources to cope. He also blamed his senior manager for not updating a spreadsheet used to keep track of approvals and the like.
“I don’t believe there was anything wrong with that spreadsheet,” Auricht apparently told the committee during his interview
“I think it may not have been kept quite up to date as I would have liked. I should say as well, I did, as a liquidator I did delegate responsibility.
“I did have another person who I spoke about who was a senior manager on the file, [name known to the committee].
” …. in fairness, I’m not sure that he, he kept on top of that as he should have either. I understand the responsibility is ultimately mine to check …. but he didn’t come to me I don’t think often enough as that was occurring to say I’ve checked that we are okay with the approvals. I should have then perhaps also have been firmer on reminding him to check that for me.
” …. all I can say is that the process broke down because we were, we were under a lot of stress to handle a lot of different matters at that time. It was a lot bigger administration that only really had those three staff members including myself.”
Efforts Auricht made to improve his office procedures in terms of logging approvals did not mollify his inquisitors, who also found that he had failed to lodge notices of meetings electronically as was required, meaning he failed to carry out adequately and properly his duties.
The reasons make for depressing reading. Auricht was under pressure on multiple fronts but nevertheless failed to maintain the standards necessary to ensure the profession retains the confidence of the community.
iNO’s mail is that an AAT appeal will be considered and Auricht has 28 days to lodge any such appeal.
ASIC however has already removed his name from the its online register and the committee’s reasons represent a mighty obstacle to surmount.
Further reading:
Classic. Just throws his most likely overworked and underpaid staff under the bus.