Licensee charged with failing to lodge reports – November 3, 2023
The financial services licensee Odyssey Equity Finance Pty Ltd has been charged with multiple criminal offences for failing to lodge reports required for each of the financial years 2020, 2021 and 2022.
Odyssey was charged with:
- three counts of failing to lodge a profit and loss statement and balance sheet; and
- three counts of failing to lodge an auditor’s report with the profit and loss statement and balance sheet.
The maximum penalty for a corporate body for each failure to lodge a profit and loss statement and balance sheet (s989B(2) of the Corporations Act) and/or failing to lodge an auditor’s report with the profit and loss statement and balance sheet (s989B(3) of the Corporations Act) is $1,332,000 (S848,870).
Charges connected to Sterling Income Trust – November 3, 2023
Raymond Jones, founder of the Sterling Group, Simon Bell, and Ryan Jones have all been charged in connection to an investigation around the collapse of the Sterling First group of companies.
Raymond Jones, founder of the Sterling Group, and Simon Bell have each been charged with 11 charges of aiding and abetting Sterling Corporate Services to engage in dishonest conduct in relation to a financial product or service, breaching section 1041G of the Corporations Act.
Raymond Jones’s son, Ryan Jones, has also been charged with 10 charges of aiding and abetting the same conduct.
For an offence of the alleged conduct against section 1041G of the Corporations Act during the relevant period, the maximum penalty is 10 years’ imprisonment and/or a fine of 4,500 penalty units – A$945,000 ($ 614,488).
Canberra property developer disqualified for two years – November 2, 2023
Paul Kenneth Nimal Hamilton of Coombs ACT has been disqualified from managing corporations for two years after his involvement in the failure of these five companies:
- Lifestyle Home Account (ACT) Pty Ltd;
- 3 Property Group 13 Pty Ltd;
- Be Athletic Canberra Pty Ltd;
- A.C.N. 601 334 749 Pty Ltd – formerly Tiger Property Group Pty Ltd; and
- A.C.N. 606 934 874 Pty Ltd – formerly 3 Property Group 2 Pty Ltd.
Between December 2019 and August 2021, Hamilton, as the director of the companies, was found lacking care and diligence, and to have had a lack of commercial mortality when he:
- allowed former directors to maintain their credit scores and continue to be directors of other companies in the group;
- did not ensure 3PG2 got its tax lodgments up to date, and did not to take steps to ensure the tax debts owed by the other four companies were paid;
- failed to participate in the management of all the companies.
At the time of ASIC’s decision, the companies owed a combined total of A$11,867,702 ($7,642,673) to unsecured creditors, including A$5,455,596.54 ($3,512,906) to the Australian Taxation Office and A$19,652 ($12,654) to the ACT Office of Revenue.
Manging director guilty of fraud – November 1, 2023
William O’Dwyer, the former managing director of companies in the Ralan Group, has pleaded guilty to six offences contrary to section 192E of the Crimes Act 1900 (NSW).
Between April 2015 and June 2018, O’Dwyer fraudulent had companies in the Ralan Group draw down on finance facilities totalling A$251m ($162m). He deceived lenders to believe that pre-sale deposits were held in a trust account, instead, the funds were loaned back to the respective development company as working capital.
The companies in the Ralan Group entered voluntary administration in July 2019, and all were placed in liquidation by March 6, 2020. The Ralan Group is estimated to owe unsecured creditors A$323m ($208m). The maximum penalty for Each offence carries a maximum penalty of 10 years imprisonment.
Two financial services companies charged – October 30, 2023
APC Securities Pty Ltd, (formerly known as McFaddens Securities Pty Ltd), and Brava Capital Pty Ltd, (formerly Dayton Way Securities Pty Ltd), have been charged in separate proceedings with multiple criminal offences due to failures to lodge financial accounts with ASIC.
They were charged with:
- three counts of failing to lodge a profit and loss statement and balance sheet; and
- three counts of failing to lodge an auditor’s report with the profit and loss statement and balance sheet.
The maximum penalty for a corporate body for each failure to lodge a profit and loss statement and balance sheet (s989B(2) of the Corporations Act) and/or failing to lodge an auditor’s report with the profit and loss statement and balance sheet (s989B(3) of the Corporations Act) is $1,332,000 (S848,870).
ASIC news week 44
Speeches
On Friday, ASIC Chair Joe Longo made an opening statement at a Parliamentary Joint Committee on Corporations and Financial Services, Oversight of ASIC, the Takeovers Panel and the Corporations Legislation. There, he gave an update on ASIC’s international work.
Photo: ASIC
“ASIC has an important role in international cooperation relating to supervisory and enforcement work and information sharing to inform our action against misconduct and that of our international counterparts,” he said. “ASIC participates in various bilateral and multilateral arrangements to enable it to obtain public and non-public information from foreign regulators and law enforcement agencies.”
He also spoke about the findings in ASIC’s Annual Report and the recent enforcement actions, which show a strong stance compared to the year before – with a 24% increase in surveillances, and a 16% increase in internal summary prosecutions.
On November 1, ASIC Chair Joe Longo spoke at the Australian Institute of Company Directors Northern Territory Annual Dinner.
He spoke about regional engagement, collaboration, and support, and ASIC’s history in becoming the regulator it is today where “no other corporate regulator in the world has the range of responsibilities given to ASIC”.
He went on: “One important and enduring priority for us is identifying and addressing misconduct that impacts First Nations people. Rather than go through a long shopping list of the ways ASIC works to achieve positive outcomes for consumers and small business in the Northern territory.”
New technology implementation
During a press conference last week, Assistant Treasurer Stephen Jones introduced a new scam website takedown capability by ASIC. Since July, it has disrupted fraudulent activates by takedowns of more than 2,500 investment scam and phishing websites; 2,100 sites were taken down, and over 400 sites are in the process of being taken down.
“Our website takedown service helps us identify and disrupt investment scam and phishing websites from causing further harm to Australians,’ said ASIC Deputy Chair Sarah Court.
Publication
A second publication on information lodged under the reportable situations regime has been released, which shows little improvement from the first publication on insights from this regime last year.
Under the regime for this period, July 1, 2022 and June 30, 2023, over 16,000 reports were made to ASIC by financial services and credit licensees. Yet, more concerns still exist over:
- the reporting remains very low, which indicates that some may not be complying with the regime;
- licensees are taking too long to identify and investigate some breaches;
- many remediation activities take too long to complete; and
- opportunities remain to improve identification and reporting root causes of breaches.
“Since its commencement, ASIC has been working with stakeholders to improve the operation of the reportable situations regime, including through providing guidance and modifications. ASIC will now move to taking stronger regulatory action to drive improved compliance with the regime, including enforcement action where appropriate,” said ASIC Chair Joseph Longo.
More resources:
- Report 775 Insights from the reportable situations regime: July 2022 to June 2023.
- Regulatory Guide 78 Breach reporting by AFS licensees and credit licensees.
- Regulatory Guide 277 Consumer remediation.
Company amendments
Link Administration Holdings Limited has announced the restatement of its half-year and full-year 2023 financial reports after ASIC raised concern in March 2023 as part of the Commission’s new financial reporting and audit surveillance program.
The concern included material misstatements in the carrying value of Funds Solutions business assets, and provisions and expenses in relation to settlement with the UK FCA.
As a result, Link Group has amended its accounting treatments and impairment of the business assets, and the restatement will result in a A$50m ($32m) increase in its half-year statutory loss and a $169m ($109m) decrease in its full-year statutory loss in 2023. The 2024 forecast for statutory profit and loss is also reduced by A$169m due to the amendments.
