Practice Alert: Completion of historical ASIC searches
ARITA acknowledges ASIC’s recent reminder of the importance of completing historical searches and again highlights the requirement for Registered Liquidators (and Trustees) to have free access to ASIC databases to support them in carrying out their statutory duties.
The June 2020 edition of the ‘Corporate insolvency update’ issued by ASIC advised that ‘registered liquidators should consider a director’s previous company roles, which could indicate their involvement in illegal phoenix activity.’ The article specified that ‘this can be as simple as obtaining an ASIC current and historical personal name extract on a director.’
The article notes that further investigations, in addition to the search, may be needed to determine whether the director has engaged in illegal phoenix activity, including possible application for funding from the Assetless Administration Fund. However, it fails to recognise that the cost of the initial searches are borne by the liquidator if there is little or no money in the external administration.
ARITA’s ‘Financial Recovery 2020 – 8-Point Plan
’ calls for liquidators (and trustees) to be given free access to all ASIC database searches. The plan highlights that not only would this mean a fairer deal for liquidators, it would also help them investigate corporate misconduct more fully (as acknowledged in ASIC’s update). Journalists currently get free access. How is it that liquidators can’t get the same?
We continue to raise this issue at every appropriate opportunity.