ASIC response: Miner a major issue

Response to Townsville Bulletin article 'Miner a major issue' by Tony Raggatt, page 31

13 June 2013
Letters to editor
'Townsville Bulletin'
Delivery by email: letters@townsvillebulletin.com.au

ASIC rejects your paper's inference of favouritism in our decision to grant conditional relief to Kagara's administrators regarding the lodgement of the miner’s 2012 financial accounts (Townsville Bulletin, June 13)

ASIC is not in the business of doing favours for anyone. We are an independent enforcement agency and our employees work here because they believe in what we are doing and they respect the public interest. Suggesting otherwise is a smear on the reputation of this organisation and more to the point, its hard-working men and women.

ASIC has specific legal powers to grant 'waivers' from various requirements in the law. People regularly ask us to use these powers through formal letters that we refer to as relief applications. ASIC treats all financial reporting relief applications even-handedly, fairly and objectively.

ASIC can exempt companies from lodging accounts, but uses that power sparingly given the public interest in companies disclosing their financial position. However, our published policy of many years is to allow companies who are not trading (because they are in administration) to defer preparing their accounts until they become active again. At that point their obligation to prepare and lodge those deferred accounts becomes due. We adopt this approach because of the substantial costs that creditors may otherwise have to bear in preparing accounts for a company that is no longer trading.

In determining relief applications, ASIC attempts to achieve two broad objectives: first, consistency and second, definite principles. Our general approach to considering relief applications is available on ASIC’s website for everyone to see.

In the matter of Kagara, we have granted deferral relief in accordance with our published policy. We did not provide an exemption from providing accounts as has been misreported. A condition to the reporting relief is that the administrators maintain arrangements to answer, free of charge, reasonable queries from the company’s members about the consequences of Kagara’s administration.

ASIC understands Kagara’s predicament is a serious matter which has had devastating consequences for creditors.

But the public can be assured in this matter all procedures and processes continue to be properly carried out.

John Price, Commissioner, Australian Securities and Investments Commission
This letter was published on 15 June 2013.