After six months on light duties those individuals called upon to consider the allegations of misconduct that ASIC routinely levels against registered liquidators suddenly have a full in-tray.
“The committee must decide within 45 business days after interviewing you whether or not you should be registered as a liquidator: s20-20(3)”. ASIC Regulatory Guide 258.
Last week Sydney liquidator Giles Woodgate’s name was added to the list of practitioners referred to a Schedule 2 Disciplinary Committee by the regulator since the inception of the committee process in March 2017.
The publication of Woodgate’s referral by ASIC is the second instance of such in two months and follows the referral of Aston Chace principal Steve Naidenov to a Committee on May 29.
So when might the two aforementioned know their fate?
iNO asks because it appears that committee don’t always arrive at their decisions in a timely manner and in the case of Adelaide liquidator Richard Auricht at least, the committee reviewing his referral is in breach of ASIC’s own guidelines on the topic.
In December last year a Schedule 2 Committee was convened to deliberate on an ASIC referral after Auricht failed to satisfy ASIC’s concerns as outlined in a show cause notice.
Six months have passed and Auricht is yet to learn of his fate. But it’s not as if Schedule 2 Committees have carte blanche to take all they time they want.
ASIC’s Regulatory Guide 258 stipulates: “The committee must decide within 45 business days after interviewing you whether or not you should be registered as a liquidator: s20-20(3)”.
45 days. Auricht was referred more than six months ago. And only last week ASIC distributed an online pamphlet extolling its credentials in respect of concern for the mental health of insolvency practitioners.
We wonder how often Thea Eszenyi has reached out to Auricht to ensure he has appropriate support as he endures this unacceptable delay, a delay ASIC can’t shrug off as someone else’s problem because an ASIC delegate always chairs the three person committees.
Of course the senior executive leader for registered liquidators has more on her plate these days after she was also made responsible for financial reporting and audit so maybe Eszenyi’s in need of support herself?
Auricht told iNO his legal representatives had advised that he should make no comment but nobody can doubt the mental and physical strain such a delay must impose on an individual, not least a small practice owner with fewer resources to contest the matter.
Speaking of which, we wonder when ASIC is going to get around to referring KordaMentha co-founder Mark Korda to a Schedule 2 Committee given more than a year has passed since Supreme Court of Victoria judge Ross Robson described Korda as a “dishonest witness” who’d given “misleading” evidence”? (See: Judge brands industry titan “dishonest).
Delays like that which Auricht is being unfairly subjected to bode ill for Naidenov and for Woodgate, the latter of which was referred to a committee after he refused to enter into a court enforceable undertaking ASIC was seeking to impose in respect of Woodgate’s involvement with East Coast Installation Pty Ltd (East Coast).
iNO’s mail is that Woodgate had initially acted in a safe Harbour capacity, helping East Coat’s directors to engineer a restructure that allowed for all employees to be paid 100 cents in the dollar without recourse to the taxpayer via FEG and for payment of a small return to unsecureds in the subsequent winding up.
The problem for Woodgate is that he accepted the appointment as liquidator and disclosing his prior involvement in his DIRRI wasn’t enough to stop the regulator from leaping on the opportunity to monster another small practitioner.
Further reading:
ASICs approach in deciding when to press ahead with a referral to a disciplinary committee is entirely opaque and is never explained. However, as this article suggests, one cannot help but think, based on what gets referred and what does not, that ASICs preference is to focus on what it considers to be the low hanging fruit. Perhaps its all a matter of notching up the yearly KPIs?
It is interesting that under s. 20-55 (3) of the IPSC is provided that the committee “must, within 20 business days after interviewing the applicant or obtaining agreement of the applicant” make relevant decisions. It is unfortunate that there is no starting point time within which the interview must be conducted and there is no sanction provided in circumstances where the mandatory time for the making of a relevant decision is breached.
The position is different in respect of a new registration application where the period of time for the making of a decision is 45 business days after the interview: s. 20-20 (3).
It is unfortunate that issues of referral to the committee are identified by way of media release but that the committee does not see fit to adhere to the statutory mandatory time limits and/or to publish relevant decisions.