Chapter 2

Provisions of the Bill

2.1        This chapter examines the provisions contained in the Corporations Amendment (Phoenixing and Other Measures) Bill 2012 and the evidence received by the committee on the proposals.

Structure of the Bill

2.2        The Bill has two schedules. Schedule 1 to the Bill contains the principal amendments to the Corporations Act 2001 and is divided into three parts, as follows:

• Part 1 contains the provisions related to the administrative winding up of abandoned companies by the Australian Securities and Investments Commission (ASIC).
• Part 2 contains the provisions intended to facilitate the future requirement that public notices related to corporate external administrations be published on a single publicly available website, to be operated by ASIC.
• Part 3 contains some miscellaneous amendments.

2.3        Schedule 2 to the Bill contains transitional provisions related to the amendments proposed in schedule 1.

Winding up of abandoned companies by ASIC

2.4        Winding up 'is the process leading to the liquidation of a company and termination of its registration and existence':

The purpose of liquidation of an insolvent company is to have an independent and suitably qualified person (the liquidator) take control of the company so that its affairs can be wound up in an orderly and fair way for the benefit of all creditors.[1]

2.5        Chapter 5 of the Corporations Act provides three methods to wind up a company: members' voluntary, creditors' voluntary and compulsory. Compulsory winding up:

... most commonly arises where a creditor petitions the court to have a company wound up on grounds of insolvency, relying on failure of the company to comply with a demand for repayment of a debt (section 459A). The liquidator is appointed by the court and is an officer of the court.[2]

2.6                  At present, the Corporations Act provides that creditors and ASIC may apply to the court for an order to wind up a company. Part 1 of schedule 1 to the Bill proposes to insert a Part 5.4C into the Corporations Act. Part 5.4C will give ASIC the power to order the winding up of abandoned companies. ASIC will be able to exercise this power in any of the following four situations:

(a) where ASIC otherwise has the power to deregister the company (i.e. the response to a compliance notice issued by ASIC on the company under section 348A of the Corporations Act is at least six months late; the company has not lodged any other documents under the Corporations Act in the preceding 18 months; ASIC has no reason to believe the company is carrying on business; and ASIC has reason to believe that making the order is in the public interest);

(b) the company has not paid its annual review fee within one year of the fee being due;

(c) ASIC has reinstated the registration of a deregistered company but has reason to believe winding up the company is in the public interest; or

(d) ASIC has reason to believe that the company is no longer carrying on business and there is no objection to the company being placed into liquidation.[3]

2.7                  To give effect to ASIC's order that a company be wound up, proposed section 489EB will provide that the company is taken to have passed a special resolution under section 491 (which allows for the voluntary winding up of a company by special resolution). Proposed section 489EC will then enable ASIC to appoint a liquidator.

2.8        The proposed amendments seek to address a practical issue that arises with phoenix companies. The Explanatory Memorandum observes:

Although large creditors, such as the Australian Taxation Office, may take steps to place a company into liquidation, this is not always the case. Where the company has limited or no assets and the company has been abandoned by the directors, creditors other than employees may have no incentive to fund the winding up of the company. The cost of placing a company into liquidation can be prohibitive for employees who have incurred losses in wealth due to the failure to receive their entitlements.[4]

2.9                  There are additional regulatory benefits associated with the proposal:

... giving ASIC the power to place abandoned companies into liquidation will enable a liquidator to investigate and report on alleged misconduct related to possible phoenixing behaviour; or to investigate and take action in respect of uncommercial transactions entered into by the company’s directors prior to deregistration or abandonment of the company.[5]

This power will facilitate the ... commencement of legal proceedings for voidable transactions (if appropriate) for the benefit of creditors ... Where the company is not placed into liquidation, the voidable transactions provisions in Part 5.7B of the Corporations Act cannot be utilised for the benefit of creditors.[6]

2.10      Treasury argued that the proposed amendments will augment existing measures in the Corporations Act that combat phoenixing activity and will act as a further deterrent to such conduct:

Both the appointing of a liquidator to investigate the company collapse and the commencing of legal actions against directors for a breach of their legal obligations will act as deterrents to those engaged in phoenix activity.[7]

2.11      The Insolvency Practitioners Association (IPA) indicated its overall support for the proposal.[8] The Australian Manufacturing Workers' Union stated that the Bill is 'a step in the right direction', although it suggests the Bill is 'more ameliorative and practical than punitive', as while it aims to ensure employees can access GEERS it 'does not seek to hold rogue employers and their directors accountable for their unconscionable actions in respect of their employees' entitlements'.[9]

2.12      Other submitters, however, raised concerns with the approach taken by the Bill. The Australian Institute of Company Directors (AICD), while noting its support for 'effective' efforts to target phoenixing, submitted that it is concerned that the measures in schedule 1 are 'not limited to instances where fraudulent phoenixing activity is suspected'.[10] The AICD argued for the inclusion of a definition of fraudulent phoenixing activity to confine the effect of the schedule to that activity.

2.13      The Master Builders Association similarly noted its support for 'targeted action' against fraudulent phoenix activity, but argued that this conduct 'should be acted against with the full severity of the current law'.[11] The Association also argued that if there is an isolated issue with GEERS, 'then this should be fixed as part of the foreshadowed legislation dealing with GEERS'.[12]

Scope of the power proposed to give ASIC

2.14      Granting ASIC the power to order the winding up of a company on its own initiative is a deviation from the present legislative approach to liquidation; Parliament has previously determined that a court has to order the compulsory winding up of a company. Master Builders Australia submitted that it is of the view that it is not appropriate for a statutory authority to have the discretionary power to order the winding up of a company, arguing that such a power is 'akin to a judicial power and its consequences should require a court's scrutiny'.[13]

2.15      It is apparent, however, that although the terminology used ('order') is similar, the standing of a court order and those that could be made by ASIC differ. Any orders made by ASIC will be administrative in nature and not authoritative. The Explanatory Memorandum notes:

In exercising its power under the new subsection 489EA(1), ASIC will not be acting in the same way, by the same process, or on the same grounds as a Court would be in ordering the winding up of a company. ASIC will be able to take into account policy considerations in ordering the winding up of the company, those considerations may include the ability for employees of the company to access GEERS, or suspicions of possible phoenixing behaviour by the directors of the company.[14]

2.16      Aggrieved parties will retain the right to seek judicial review, although they will not be able to seek a merits review by the Administrative Appeals Tribunal. The Explanatory Memorandum provides the following reasoning:

Whilst it is preferable for decisions that affect the rights of individuals to be subject to merits review by the Administrative Appeals Tribunal, once a company is placed into liquidation the process gives third parties proprietary rights which would be affected by any decision regarding the legality of the decision to commence the winding up. In relation to any dispute concerning proprietary rights, a court is the appropriate forum for determining an individual's property rights as opposed to an administrative tribunal. Similar decisions made by ASIC, including deregistering a company, are currently not subject to merits review.[15]

2.17      Another indication that ASIC's proposed discretionary power remains subordinate to the courts' can be found in proposed subsection 489EA(7), which prevents ASIC from winding up a company if an application for such an order is before the court.

Winding up in the 'public interest'

2.18      The AICD expressed its concern that the winding up option contained in proposed subsection 489EA(3) (refer to paragraph 2.6(c) above) is not just limited to situations where phoenixing is suspected. The AICD argued:

... pursuant to section 601AH of the Corporations Act ASIC has the power to "reinstate the registration of a company if it satisfied [sic] that the company should not have been deregistered", the Bill then provides that ASIC may order the winding up a company [sic] if "ASIC has reinstated the registration of the company under subsection 601AH(1) in the last 6 months" and "ASIC has reason to believe that making the order is in the public interest". These provisions apply regardless of whether fraudulent phoenix activity is suspected and give ASIC broad powers to reinstate companies and then order a winding up regardless of whether the company has previously been deregistered appropriately.[16] (footnotes omitted)

2.19      The Master Builders Association also outlined its concern that the powers could apply to legitimate companies that had made administrative errors.[17]

2.20      The Minister's second reading speech indicates that the main rationale behind this provision is to ensure that employees are able to access GEERS without being disadvantaged by the status of the company's registration. The then Parliamentary Secretary to the Treasurer stated:

... where the abandoned company has been deregistered by ASIC or by its members, ASIC or the company's employees have to apply to the courts to reinstate the company and only once the company is reinstated so that it can be placed into liquidation could any potential employee eligibility for GEERS be triggered.[18]

2.21      The winding up powers in proposed subsections 489EA(1) and (2) are similar to the situations in which ASIC may already order the deregistration of a company under section 601AB, with the added requirement that ASIC has reason to believe it is 'in the public interest'[19] to do so.[20] Therefore, the requirements under proposed subsections 489EA(1) and (2) are likely to have already been met if the deregistration was ASIC‑initiated. Further, ASIC may only reinstate the registration of a company if it is satisfied that the company should not have been deregistered;[21] for ASIC-initiated deregistrations it does not seem that ASIC could be satisfied that the deregistration should not have taken place, and then rely on proposed subsections 489EA(1) and (2) to wind up the company. Subsection (3) provides another option for ASIC to order the winding up of a company when ASIC believes it is in the public interest to do so.

2.22      In cases where the company's deregistration was voluntary, another provision included in the Bill appears relevant. If passed, the Bill would allow ASIC to refuse an application to voluntarily deregister a company where ASIC decides that it is more appropriate for the company to be placed into liquidation.[22] Allowing ASIC to reinstate the registration of a company and order that it be wound up complements that provision and the broader intent of the schedule (enabling ASIC to act where other creditors or employees of the company are unwilling or unable). As noted in paragraph 2.9, there are also other additional regulatory benefits.

Committee view

2.23      The powers that the Bill proposes to give ASIC to allow it to order the winding up of a company are framed similarly to existing powers ASIC has to initiate the deregistration of a company, with the added requirement that ASIC must have reason to believe it is in the public interest that the company be wound up.

2.24      The committee notes the arguments from some submitters that the power proposed to be given to ASIC to reinstate the registration of companies and then order winding up is too broad. The committee also notes, however, that ASIC can only reinstate the registration of a company if ASIC is satisfied that the company should not have been deregistered, and can then only order the winding up of such a company if it has reason to believe it is in the public interest. The intent of the Bill is to target abandoned companies—companies which are clearly not fulfilling their obligations under the Corporations Act—to ensure employees of these companies can access GEERS and so misconduct can be investigated. The committee considers the public interest test is an appropriate and adequate safeguard. Aggrieved parties will be able to apply to the courts for orders to stay or terminate the winding up. In any case, under the current legislation if ASIC was of the view that an already deregistered company should be wound up the courts would necessarily be involved.

2.25      However, the committee notes that there is some concern among stakeholders. The then Parliamentary Secretary to the Treasurer noted that he anticipated ASIC will publish 'guidance to industry on the circumstances in which this power will be used'.[23] ASIC has also indicated that it will commence preparing guidance once the final form of the Bill is known and in accordance with its normal consultation process.[24] The committee supports this and calls on ASIC to develop such guidance in a timely manner.

Appointment and remuneration of liquidators

2.26      Proposed section 489EC will provide that if ASIC orders the winding up of a company, ASIC may appoint a liquidator and determine their remuneration. The liquidator must consent to the appointment.[25]

2.27      The Australian Council of Trade Unions (ACTU) noted that the amendments 'do not suggest an intention to alter the regular position that the liquidator is remunerated from the property of the company'. The ACTU suggested that in cases where the company has been abandoned and has no assets, it could be the case that potential liquidators would be unwilling to accept an appointment, or if they do accept an appointment, 'they may rely on section 545 and perform little if any investigation or other activities'.[26] The IPA raised this issue as well, submitting that:

... it is unreasonable to expect liquidators to consent to appointments where payment of their remuneration is unlikely. While liquidators run this risk with any liquidation to which they consent, the risk of non-payment in these types of appointments is higher given that the companies are defunct and no creditor has shown any interest in pursuing their winding up. Where there are potential recoveries from voidable transactions, it is unlikely that there will be any funds available to initially pursue such actions.[27]

2.28      The IPA, however, drew attention to the extended application of ASIC's Assetless Administration Fund,[28] which forms part of the government's proposed reforms to the insolvency sector. Such a proposal (or a similar initiative) could present a solution to this issue. The proposals paper states:

... if a company has been suspected to have been involved in phoenix activity but there are no assets left in the company and no practitioner is willing to accept an appointment to that company, ASIC might (depending upon competing demands for regulatory resources) provide funding towards the costs of a practitioner performing the mandatory tasks in the administration (in order to induce a practitioner to accept the appointment) as well as towards preparing and providing a report on whether it has been involved in phoenixing.[29]

2.29      In its submission, Treasury advised that on 14 December 2011 the government approved an extension of the permitted uses of the Assetless Administration Fund 'to include funding activities undertaken by insolvency practitioners directed against phoenix activity or breaches of officer's duties that impact upon employees, consumers or small businesses'.[30]

2.30      ASIC has indicated that, although it will need to absorb internal staff costs, it intends to seek reimbursement of ongoing external costs such as liquidator's fees from the Assetless Administration Fund.[31]

2.31      The IPA also raised as an issue the proposed arrangements for funding liquidators of abandoned companies. While the IPA queries why it is necessary to have ASIC determine the remuneration for liquidators of companies that do have creditors (who would ordinarily approve remuneration), it does agree that ASIC should be able to determine remuneration where there are no funds or creditors. The IPA noted:

There is no guidance in the Bill as to how ASIC might determine remuneration, but we note that the Explanatory Memorandum says that ASIC "will not be restricted in how it may choose to structure the remuneration of the liquidator" ... Given the Senate Economics References Committee's focus on harmonisation of the laws of personal and corporate insolvency, where possible, and the government's acceptance of this, we draw to this Committee's attention the comparable process in bankruptcy, under s 161 of the Bankruptcy Act, where the default arrangement is that the Inspector‑General in Bankruptcy may decide upon the trustee’s remuneration. The bankruptcy regulations deal with the matters to which Inspector-General must have regard in doing so. We suggest that criteria be provided in relation to ASIC's powers.[32] (footnotes omitted)

2.32      ASIC's submission advised that to fulfil its new responsibilities, it will likely 'seek tenders from firms interested in providing winding up services at a fixed rate'. ASIC is expecting liquidator's fees to be approximately $5,500 per matter.[33]

The administrative burden on ASIC and possible incentives created by the provisions

2.33      Related to the discussion above are concerns about the cost of administering the provisions and the implications for ASIC's resources. One area also warranting consideration is whether undesirable incentives will be created for company directors if ASIC is given the discretionary power to order the winding up of a company.

2.34      In its submission, ASIC stated:

Preliminary enquiries suggest up to 50 companies per annum may be wound up under the Bill. Assuming liquidator's fees of approximately $5,500 per matter that would lead to an annual cost to the [Assetless Administration Fund] of $275,000.

In addition, there will be an initial 'group' of companies that may qualify for winding up under the Bill upon its commencement. Based on figures provided by DEEWR, we estimate there are approximately 100 companies in this category. At this stage, ASIC is still considering how to resource these matters and, in particular, how to fund any external liquidator costs associated with them.

A further initial group of 107 companies might have qualified for winding up but have already been deregistered, often some years ago. Given the legal requirements for re‑registration of companies, we do not anticipate at this stage that a material number of these companies will be re-instated. Therefore, at this stage, we believe it is unlikely that many companies within this group will be wound up under the Bill.[34]

2.35      In its submission, the IPA noted instances of well-intentioned directors of insolvent companies who end up abandoning their companies because liquidators will not agree to be appointed (as the company has no assets from which the liquidation could be financed). The IPA states:

There is nothing in this Bill that would directly accommodate those directors. However we raise the prospect that directors may be able to initiate a voluntary winding up of their insolvent assetless company, through a request made to ASIC, in particular where there are employees involved, in order to have ASIC liquidate the company. This is a process that ASIC could offer as an avenue for such directors if this Bill becomes law.[35]

2.36      While it may be the case that there are well-intentioned directors who are unable to place their assetless company into liquidation, an issue could arise regarding companies that could be wound up by other processes, but are not based on the expectation that ASIC will be requested to order the winding up of the company by the employees of the company.

2.37      In its submission ASIC indicated that it is aware of such possibilities, and advised that 'to the extent possible, we will monitor whether this occurs and seek to develop policy to try and deal with this concern'.[36]

Committee view

2.38      The committee considers that these matters are best addressed by ASIC in its aforementioned guidance and the approach it takes to administering the provisions; although the committee notes that the intention of the Bill is not to assist well‑intentioned directors, but to enable affected employees to access a government assistance scheme and to facilitate more investigations of suspected fraudulent phoenixing activity and uncommercial transactions.

Notification requirements

2.39      The Bill places two notification obligations on ASIC. The first only applies to the winding up process outlined in proposed subsection 489EA(4) (see subparagraph 2.6(d) above). If ASIC intends to rely on this process to wind up a company, ASIC will be required to issue a notice to the company and each of its directors stating ASIC's intention to make a winding up order. The notice must give at least 20 business days notice of ASIC's intention to make the order. ASIC will not be able to order the winding up of the company if the company or one of its directors objects. This provision does not apply to a person if ASIC 'does not have the necessary information about the person's identity or address'.[37]

2.40      The second notification requirement applies generally to any winding up order ASIC can make—that is, it applies to each of the winding up processes outlined in proposed subsections 489EA(1), (2), (3) and (4) (refer to paragraph 2.6).

2.41      Under proposed subsection 489EA(6), before making any order ASIC will be required to:

(a) give notice of its intention to make the order on the ASIC database; and

(b) both:

(i) publish notice of its intention to make the order; and

(ii) do so in the prescribed manner.

2.42      The Explanatory Memorandum includes the following description of proposed subsection 489EA(6):

ASIC is also required to give notice of its intention to make the order on the ASIC database and once it has made the order, publish the order in the prescribed manner.[38] (emphasis added)

2.43      There appears to be some discrepancy between what the text of the Bill states and what is described in the Explanatory Memorandum. Proposed subsection 489EA(6) begins with the text '[b]efore making an order'; accordingly, the remainder of the subsection refers to the notification requirements regarding ASIC's intention to make an order. It does not appear to expressly require that ASIC publish the order once it has been made, as described in the Explanatory Memorandum.[39]

2.44      In considering whether publication of the final notice need occur, similar processes already contained in the Corporations Act which allow ASIC to act on its own initiative are instructive. For instance, the process for ordering the winding up of a company proposed in the Bill appears largely similar to that for the ASIC-initiated deregistration of a company. If ASIC decides to deregister a company, it must give and publish notice of the proposed deregistration,[40] but it does not have to publish notice that the company has actually been deregistered. This aspect is similar to what the Bill would require for winding up orders made by ASIC, although there are some differences. While ASIC does not have to publish the final notice when it deregisters a company, it must give notice to the company's directors.[41] The Bill does not require this for the winding up process. Even under the process outlined in proposed subsection 489EA(4), which would require ASIC to give notice of its intention to make an order to the company and its directors, ASIC is not expressly required to advise that winding up has actually been ordered.

Committee view

2.45      This aspect of the Bill and the Explanatory Memorandum could benefit from review. It will become clear that the winding up was ordered when ASIC appoints a liquidator to administer the winding up of the company, as provided under proposed section 489EC, and the liquidator makes a decision under section 496. Also, the notice of ASIC's intent is sufficient to apply to the court and seek a stay of the order. However, it may be appropriate to amend the Bill so that it clearly requires ASIC to publish the final order in the prescribed manner, as envisaged in the Explanatory Memorandum. At the very least, the apparent discrepancy between the Bill and the Explanatory Memorandum should be clarified.

Time between when an order is proposed and made

2.46      There are some further differences between the proposed winding up by ASIC provision and other ASIC-initiated processes.

2.47      Under the ASIC‑initiated deregistration process, ASIC must publish in the ASIC Gazette notice of the proposed deregistration, and can only deregister the company once two months have passed since the notice was published.[42] The Bill, however, does not stipulate a period of time that must elapse between when ASIC must give public notice of its intention to make an order to wind up a company, and when it can make the order. The Bill does provide that, for the option to wind up a company outlined in proposed subsection 489EA(4), ASIC must provide ten business days for the company and the directors it has notified to object to the proposed order (and it must provide that notice 20 business days before it makes the order). Similar considerations regarding time, however, are not provided for the options to wind up a company under proposed subsections 489EA(1), (2) and (3).

Committee view

2.48      While there may be potential for some inconsistencies in ASIC's approach if the legislation does not require a minimum period of time to elapse between when ASIC proposes to order the winding up of a company and when it makes the order, these considerations need to be weighed against the risk of unduly delaying the ability of employees of phoenix companies to access assistance. As the provisions clearly target abandoned companies and in the absence of compelling evidence to the contrary, on balance the committee considers this provision should remain unchanged although ASIC should exercise appropriate judgement in exercising this power.

Publication requirements

2.49      Part 2 of schedule 1 to the Bill proposes to make a number of amendments to various sections of the Corporations Act to provide that public notices in corporate external administrations are to be published in a manner prescribed by the regulations, rather than in an advertisement in the print media and/or the ASIC Gazette. This will facilitate the government's announced intention to transition from newspaper notices to electronic publication on a single website administered by ASIC. This will be implemented by future amending regulations to the Corporations Regulations 2001.[43] Under the new system, instead of being required to publish or arrange for the publication of the notice in newspapers or in the ASIC Gazette, the person required to give the notice will discharge this responsibility by lodging it with ASIC, which is then required to publish the notice on the website.

2.50      The Explanatory Memorandum notes that the regulations will prescribe a fee for the publication of corporate insolvency notices on the website administered by ASIC, but even with the fee it 'is expected that the transfer to electronic publication of notices will result in savings to the industry'.[44]

2.51      ASIC submitted that it has commenced developing the new website and will 'work with the industry to ensure an effective transition to the new system'.[45]

Other amendments

2.52      Part 3 of schedule 1 to the Bill includes some miscellaneous amendments to the Corporations Act relating to the Paid Parental Leave scheme and the powers of the court in relation to company reinstatements.

2.53      Items 27 and 28 seek to impose an obligation on receivers, administrators and liquidators to advise the Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs (FAHCSIA) where a company to which they are appointed is a paid parental leave employer. The amendment will ensure that FAHCSIA is notified of an insolvency practitioner's appointment, even when it is not a creditor. The rationale for this is outlined in the Explanatory Memorandum:

The new law allows FAHCSIA to determine whether to continue paying paid parental leave payments to the company or to make the paid parental leave payments directly to the employee.[46]

2.54      Item 29 proposes to empower the court to make directions and otherwise validate actions taken during a period of deregistration of a company, when ASIC has reinstated the registration of that company. The Explanatory Memorandum notes that currently the court may validate actions taken during a period of deregistration when it has ordered the reinstatement of a company's registration, but it does not have that power when ASIC has reinstated the registration.[47]

2.55      The IPA indicated its support for these proposals.[48] Little other detailed evidence was received which commented on these other amendments, although Master Builders Australia outlined its objections to the broader administrative arrangements associated with the Paid Parental Leave scheme.[49]

Committee view

2.56      Fraudulent phoenixing activity is clearly a reprehensible way to conduct a business. The phoenixing measures contained in the Bill will provide a solution to certain situations where employees affected by fraudulent phoenixing activity find it difficult or impossible to access payments under GEERS, the government scheme designed to assist employees who have lost their employment due to liquidation or bankruptcy. The measures will also enable investigations of alleged misconduct in those companies to occur.

2.57      While the proposed amendments are to the Corporations Act, a broad piece of legislation that applies to companies generally, the particular circumstances in which the phoenixing measures are intended to apply mean that they will not affect the overwhelming majority of companies and directors. The drafting of the proposed amendments mean that they only apply to companies which are not complying with their obligations under the Corporations Act.

2.58      The committee endorses the measures contained in the Bill that are aimed at ensuring employees affected by fraudulent phoenix activity can access GEERS, and which will otherwise discourage and combat phoenix activity. The remaining provisions contained in the Bill are also supported. However, the committee wishes to make the following observations.

2.59      The committee considers that some clarification is needed regarding the publication of orders made by ASIC that a company be wound up. After reviewing the Bill and its Explanatory Memorandum, the committee considers the description given in the Explanatory Memorandum of how proposed subsection 489EA(6) will operate is not fully consistent with the text in the Bill. It may be the case that there is an error, either in the proposed subsection itself or in the relevant section of the Explanatory Memorandum. Alternatively, the existing arrangements which would give effect to the description in the Explanatory Memorandum have not been fully detailed. In any event, there is room for the Bill and/or the Explanatory Memorandum to be clearer on this issue.

2.60      The committee also sees merit in ASIC being required to include in its annual report information about the exercise of its powers under the proposed phoenixing provisions. At present, ASIC is required to apply to a court to have the winding up of a company ordered. While there are benefits in an administrative power being granted to ASIC that will allow it to place abandoned companies in liquidation without applying to a court, it is appropriate that some reporting of how this discretionary power has been used takes place. Further, the reporting of this information may assist in monitoring and evaluating the success of the measures.

Recommendation 1

2.61      The committee recommends that the government review proposed subsection 489EA(6) and the Explanatory Memorandum with a view to making it clearer what the Australian Securities and Investments Commission's obligations are regarding the publication of winding up orders once it has made them.

Recommendation 2

2.62      The committee recommends that subsection 136(2) of the Australian Securities and Investments Commission Act 2001 be amended to require the Australian Securities and Investments Commission to include in its annual report information about the exercise of its powers under the proposed subsections 489EA(1), (2), (3) and (4) of the Corporations Act 2001 contained in the Bill.

Recommendation 3

2.63      After due consideration of recommendations 1 and 2, the committee recommends that the Senate pass the Bill.

 

Senator Mark Bishop
Chair

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