ASIC Once Again Is Successfully Prosecuting Company Officers For Non-Compliance

On 16 August 2021, ASIC released news of its prosecution of persons failing to assist liquidators in the course of their duties.

The Statistics

In ASIC’s media release, the corporate regulator indicated it had prosecuted 124 people in relation to 224 separate breaches of the Corporations Act 2001 (Cth) (“the Act”) in the period of 1 January 2021 and 30 June 2021. These prosecutions provide some indication that government agencies may, in some circumstances, be recommencing collections and monetary penalty notices subsequent to the COVID-19 relief measures. The prosecutions lead to $341,407 in fines and costs issued against the 124 prosecuted parties, leading to an average penalty of $2,753.28 per person.

ASIC’s hard stance in enforcing compliance measures stems from the non-compliance of directors, officers and other related parties of companies in liquidation, in their duty under the Act to assist. Obligations to comply to a liquidator’s request, at large, stem from the operation of sections 475, 530A and 530B of the Act. Depending on the circumstance, this may require certain parties to:

  1. Operation of section 475A of the Act

A duty is owed by any and all directors and secretaries of a company (as applicable) to submit to a liquidator a Report on Company Affairs and Property (ROCAP), formerly known as a Report As To Affairs (RATA). This form identifies key information about a Company, such as assets and liabilities, and any other information that may be of assistance in the course of a Liquidator’s duties.

  1. Operation of section 530A of the Act

In the case of directors or company officers: offer up any and all available Company books and records, provide the location of such books and records, provide any and all information about the Company’s business, property, affairs and financial circumstances, and any such further attendance that would assist the liquidator in their enquiries; and

  1. Operation of section 530B of the Act

In the case of any other person: offer up any and all books and records at the request of or notice produced by a liquidator.

It is noted that section 530B can extend to any person in connection with the company in liquidation. This may be an accountant, book-keeper, lawyer, or any other person (professional or otherwise) who may retain copies of the company’s books and records. As such, it is important to know your rights and obligations in relation to a section 530B notice. 

Reporting Non-Compliance

The (former) Liquidator’s Assistance Program (LAP) was a mechanism whereby ASIC actively assisted liquidators in their enquiries by intervening when a report of non-compliance was received. This function is still available to liquidators today but is contained within the ASIC Regulatory Portal.

In order for ASIC to adequately assist, liquidators must provide as much information as is readily available, such as:

  1. Circumstances of winding up;
  2. Relevant officers, relationship to company and their contact details (residential and business addresses, email and telephone);
  3. Deficiency of assets (and schedule of creditor claims);
  4. Contact with any company officers, attempted or otherwise;
  5. Any knowledge of books and records in existence but not in the liquidator’s possession; and
  6. Any party that may possess the books and records referred to in Point 5.

In the instance ASIC is willing to intervene, they may require a further statement or affidavit verifying the history of the matter.

Need assistance with pursuing the books and records of a company or corresponding with ASIC? Worried about your rights and duties in assisting a Liquidator?

If you are attempting to retrieve, or have been requested to deliver a company’s books and records, or have issued or received a section 530A or 530B notice, you should contact our office immediately for a consultation on your options and obligations.

Our expert team can provide you advice tailored to your circumstances and are ready and willing to take your call.

Contact us today:

Brisbane Lawyers on (07) 3009 8444, or by email at [email protected]
Sydney Lawyers on (02) 9307 8900 or by email at [email protected]

The blog published by Rostron Carlyle Rojas is intended as general information only and is no legal advice on any subject matter. By viewing the blog posts, the read understands there is no solicitor-client relationship between the reader and the blog published. The blog should not be used as a substitute for legal advice from a legal practitioner, and readers are urged to consult RCR on any legal queries concerning a specific situation.


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