23 May 2018

18-147MR Federal Court dismisses appeal from AAT decision to disqualify director of 18 failed companies

The Federal Court has dismissed an appeal from a decision of the Administrative Appeals Tribunal, affirming ASIC's decision to disqualify Mr Lubo Zivanovic, of Bilgola Beach, NSW, from managing corporations for three years.

ASIC disqualified Mr Zivanovic on 18 February 2016, following his involvement in the management of numerous failed companies, namely:

- Oneover Pty Ltd (ACN 105 854 475);　

- Bargara Rentals Pty Limited (ACN 123 819 876);　

- Bargara Services Pty Limited (ACN 106 082 268);

- Backvet Pty Ltd (ACN 104 664 422);

- Markaway (NSW) Pty Ltd (ACN 070 008 507);

- Toandtwo Pty Ltd (ACN 118 706 291);

- Girraween Scaffold (Australia) Pty Ltd (ACN 129 942 132);

- Mountrich Pty Ltd (ACN 129 457 834);

- Devlaw Pty Ltd (ACN 073 291 960);

- Muneemake Pty Ltd (ACN 105 501 102);

- Tinaduke Pty Ltd (ACN 127 655 805);

- Cebakay Pty Ltd (ACN 105 855 749);

- Invotow Pty Ltd (ACN 105 008 044);

- Kakconab Pty Ltd (ACN 135 880 625);

- Ezocom Pty Ltd (ACN 127 199 713);

- Fratocom Pty Ltd (ACN 090 682 752);

- Notxituk Pty Ltd (ACN 068 575 922); and

- Twooftwo Pty Ltd (ACN 096 737 450).　

All the companies managed by Mr Zivanovic operated in the building and construction industries and were wound up in liquidation between 2008 and 2014. Liquidators lodged reports for all 18 companies, alleging each company was insolvent and had failed to keep books and records. The total estimated deficiency by the liquidators was $26,855,268.

The liquidators of Noxituk Pty Ltd and Ezocom Pty Ltd also lodged supplementary reports with ASIC that alleged these companies failed due to Mr Zivanovic’s poor management and control, extremely large debts that were accrued, their failure to pay tax and lack of company records.

Mr Zivanovic appealed ASIC’s disqualification decision to the AAT and obtained suppression orders that prevented ASIC from disclosing his disqualification. On 8 August 2017, the AAT affirmed ASIC's decision. Mr Zivanovic then appealed the AAT's decision. On 17 May 2018, the Federal Court dismissed Mr Zivanovic's appeal. Mr Zivanovic is now disqualified from managing corporations until 18 February 2019.

24 May 2018

18-149MR Cash Converters pays $650,000 due to poor debt collection practices

An ASIC surveillance found that Cash Converters Personal Finance Pty Ltd ('Cash Converters') had systematically failed to meet regulatory guidelines on debt collection practices, including by too frequently contacting consumers.

ASIC found that as a result of poor internal controls and policies Cash Converters routinely breached Regulatory Guide Debt collection guideline: for collectors and creditors (RG 96), which recommends that consumers be contacted regarding a debt not more than three times per week or 10 times per month. These guidelines are based on legislative prohibitions on harassment and coercion.

Cash Converters also provided incorrect information to consumer credit reporting agency Equifax. This may have resulted in up to 38,500 customers being reported with inaccurate amounts owing over a one-month period.

28 May 2018

18-157MR ASIC cancels registration of Victorian auditor

ASIC has cancelled the registration of Victorian auditor, Philip James Dowsley, as a registered company auditor.

Mr Dowsley requested the cancellation during the course of proceedings brought by ASIC before the Companies Auditors Disciplinary Board (CADB). The cancellation took effect on 31 March 2018.

ASIC took the CADB action because Mr Dowsley had failed to comply with undertakings he gave to the former Companies Auditors and Liquidators Disciplinary Board (CALDB) in October 2015, and due to the adverse outcomes of an independent peer review of Mr Dowsley’s first four audits following his completion of a suspension ordered by the CALDB.

04 June 2018

18-164MR ASIC temporarily extends relief for managed investment and superannuation schemes for certain disclosure obligations

ASIC has extended two ASIC instruments to allow additional time to consider the policy position in relation to certain disclosure obligations of managed investment schemes and superannuation trustees.

The relevant instruments are: [CO 12/749] Relief from the Shorter PDS regime and ASIC Superannuation (RSE Websites) Instrument 2017/570. Each instrument had been due to expire on 30 June 2018.

These extensions will maintain the status quo in the meantime, enabling ASIC to adjust or revoke the relief once the policy position is settled by Government.

The expiry dates specified in the instruments align with the usual 10-year sunsetting period for legislative instruments under the Legislation Act 2003. No assumption should be made that the instruments will continue in force for that length of time.

13 June 2018

18-173MR Bananacoast Community Credit Union pays $50,400 for misleading advertising and provides remediation to consumers

ASIC enforcement action has resulted in four infringement notices totalling $50,400 to Bananacoast Community Credit Union Pty Ltd (BCU) for potentially misleading statements in several online advertisements, as well as remediation to affected consumers.

The advertisements, which ran in 2017, offered a special interest rate for home loans and personal loans but did not clearly or prominently disclose that the consumer was required to pay for consumer credit insurance (CCI) for five years to receive the advertised lower interest rate. Some advertisements included a fine-print disclaimer while others did not display any further information.

The advertisements that did carry a disclaimer did not give suffient prominence to important conditions and did not adequately explain how some of the conditions operated.

ASIC considered that the ‘click through’ facility used on some websites, which provided additional information on other webpages, was not adequate to correct the misleading overall impression.

ASIC Deputy Chair Peter Kell said, 'A promotional offer with conditions attached must not bury the conditions in fine print or elsewhere, particularly when the promotion involves a potentially poor value product such as CCI’.

04 June 2018

AUSTRAC and CBA agree $700m penalty

An agreement has been reached today between AUSTRAC and the Commonwealth Bank of Australia (CBA) for a $700 million penalty to resolve Federal Court proceedings relating to serious breaches of anti-money laundering and counter-terrorism financing (AML/CTF) laws.

The parties will jointly approach the Federal Court seeking orders to this effect. It is anticipated that a hearing on penalty will be scheduled in the coming months.

If agreed by the Federal Court this will represent the largest ever civil penalty in Australian corporate history.