John Williams (NSW, National Party) Share this | Link to this | Hansard source

I would like to make some comments on the committee's report on the statutory oversight of the Australian Securities and Investments Commission. I note that recommendation (1) has been accepted by the government. The committee recommends that ASIC amend its website to include an explanation of the meaning and significance of holding an Australian financial services licence. That, to me, would be common sense. I have concerns with ASIC and some of the things they are doing, but mainly with the lack of government action. It was years ago now that we handed down the recommendations of the Senate inquiry into liquidators, administrators and receivers. What action has the government taken? I will tell you the action the government has taken: absolutely nothing. We recommended that an ombudsman be set up to oversee some of the charges that the liquidators are charging. I think some of the charges are outrageous—$700 an hour et cetera.

We recommend that the liquidators be licensed, so that ASIC has the power to cancel or suspend a licence at any stage. Of course, the liquidator would have the right to go to court to have that licence put back in place. We recommend that if any liquidator allowed their public indemnity insurance to lapse there would be immediate suspension of their licence. But that industry still goes untouched, and there are some 660 registered liquidators in our country.

I will not comment on a case I am watching very closely. The court wound up on that case this week. That was one of the reasons that I called the inquiry into this industry. When the decision comes down—and I have a fair idea which way the judge is going to rule—ASIC will have a lot more questions to answer, I assure you, come next Senate estimates or if I happen to be in the vicinity when the judge hands down his decision on that court case. I will not go into any details, of course.

The Parliamentary Joint Committee on Corporations and Financial Affairs has oversight of ASIC. I see nothing wrong with that. My opposing colleague Senator Cameron might want to comment on the fees and charges of many in this industry, which he learnt about at a recent Senate inquiry we had. I make the point: why would a committee do all the work, put forward 17 recommendations to the government, handed down in September 2009, and the government does not act? A lot of change is required in this industry—regulations need to be changed to give ASIC the powers to do their job properly—but it requires the government to act, and this government has not acted. To me, that is unacceptable. I do not know how many tens of thousands of dollars it costs to run an inquiry. We travelled to Adelaide, Sydney and Newcastle.

There are people out there who have simply been done over by a rogue liquidator, Stuart Ariff, who is now in jail for six years. Of course, ASIC did not act on him until the courageous Adele Ferguson came forward in the media to highlight what this man had done. After three or four years of complaints, ASIC finally it took him to court where he pleaded guilty to 83 counts of wrongdoing. I asked the DPP, 'Have you had a referral from ASIC?' and the answer was no. We had to write to ASIC to get a referral to the DPP, where charges were actually laid, the jury made a decision and then the judge sentenced him. I know that people were done over by the rogue liquidator Stuart Ariff. I know it has destroyed their lives in many respects. I know they live with the problems.

There is a Malaysian owned car-wash company whose name has slipped my mind. The liquidator got in control of the company and it cost the company $1.8 million to have Stuart Ariff removed from the company. When a company is in liquidation or administration, who has a spare $1.8 million to remove a rogue liquidator? Luckily that company did have the money to do that, but it is devastating for them to see what was happened. I blame ASIC for not doing their job properly. I continued to ask Mr D'Aloisio, when he was CEO of ASIC, whether they were resourced enough and he said they were. Of course, now the answer from Mr Medcraft is that they could always do with more funds.

As far as I am concerned, the government needs to look at the recommendations of these Senate committees. If it does not, why are we having the committee hearings? Why are we doing the work? Why are we spending taxpayers' money to have no change in what happens?

By the way, that Malaysian owned company is Car Lovers, which does car washes around Australia. It has spent $1.8 million in legal fees to remove a shonky liquidator. That was the recommendation of the committee: to see that ASIC had the power, with one phone call, to cancel their licence. The liquidator could go to court to apply to have it reinstated, but we need to give ASIC the power, with one phone call, to suspend the licence of a liquidator. That in itself would send a clear message to this industry: 'If you do the wrong thing and the evidence is put forward to ASIC, in one phone call you will be sat on your backside. You will be out of business because your licence has been suspended.' That in itself would be of huge benefit in returning confidence to the liquidating and insolvency practitioner industry, in which I believe so many Australians have very little confidence.

In commenting on the one recommendation from the government for ASIC to upgrade its website, I hope that the government actually does something. But I think it is a little too late. Hopefully after 14 September I will be in the position of being in government where I can see those changes introduced.

Question agreed to.