SWEEPING MEASURES TO CLEAN UP INSOLVENCY PROFESSION

The Senate Economics References Committee has made 17 recommendations to force proper accountability and regulation of liquidators and administrators and give Australians greater confidence in their industry.

The Nationals Senator for New South Wales John Williams, who instigated the inquiry, says from the outset it was obvious the Australian Securities and Investments Commission could not fulfil its role adequately and had come in for sustained criticism.

"Time and time again people told the committee of their complaints to ASIC about liquidators only to have little or no response from ASIC. ASIC said it could do the job, but the committee believes its corporate insolvency arm should be transferred to the Insolvency and Trustee Service Australia and be named the Australian Insolvency Practitioners Authority (AIPA).

AIPA would regulate personal bankruptcy and corporate insolvency and ASIC would transfer to it the necessary resources and expertise.

The committee feels a flying squad should be established to conduct random audits of insolvency practitioners, and that a licence should be suspended if a liquidator is not adequately insured.

The issue of outrageous fees was central to many submissions, and the committee believes AIPA should be able to suspend a liquidator's licence if it believes overcharging has occurred. Liquidators could be removed if creditors pass a vote of no confidence, or it appears costs will outweigh the benefits.

It was heartbreaking to read and hear the stories of everyday people who have suffered financially and mentally through the actions of a minority of rogue practitioners.

It may be some consolation that if the Government accepts the recommendations the insolvency industry would be under greater scrutiny and tighter regulation to stop these practices", Senator Williams said.