ASIC continues its focus on advisors offering to assist financially distressed companies, especially where that advice facilitates illegal phoenix activity.
ASIC has recently commenced writing to directors of companies subject to a winding up application to warn them about untrustworthy advisors.
Certain advisors use public information, like ASIC’s Published Notices Website, to identify directors of companies subject to a winding up application or in financial distress and ‘cold-call’ them offering advice. ASIC’s letter to directors notes some of the warning signs of untrustworthy advisors and suggests to push back against those who seek to exploit vulnerable directors.
This comes on the back of ASIC’s successful prosecution of Timothy Donald Somerville, a NSW solicitor who advised eight separate clients to implement illegal phoenix arrangements.
The ATO also continues its operations against illegal phoenix activity, working with ASIC’s internal Phoenix Working Group. As part of its strategy to increase the information it has on the marketplace to target this type of activity, the ATO will be undertaking further “access visits” in the future.
The ATO’s assistant commissioner Scott Parkinson said “We will continue to go in hard and use the force of the law where we see people deliberately and systematically liquidate companies to rip off their employees, their suppliers and the community’s revenue.”
September 2016