gratifying to see that - thank you for the link mrlord - I was just skimming through this article - it is not my field - There's a silver lining to Palmer and Queensland Nickel's downfall
Among the salacious headlines last week from Queensland Nickel's collapse was that the well upholstered MP faced five years in the slammer for siphoning $200 million from the Townsville smelting operation.
According to the administrator FTI Consulting, there was evidence the company had been trading whilst insolvent and that Palmer used Queensland Nickel as a "piggy bank" to prop up his other businesses.
For those of who have not been through this news cycle previously, your diarist's advice would be: Don't hold your breath.
In the aftermath of the financial crisis, liquidators and auditors of collapsed companies clawed over one another as they implored the regulator to take action and seek legal redress for what they deemed were clear breaches of the law.
It's worth noting that not all collapses are the result of malfeasance and wrongdoing. Poor timing, bad luck and sheer stupidity can all play a part. But when court appointed liquidators point out what they deem to be flagrant breaches of the Corporations Act, you'd expect some kind of public examination from the regulator.
Babcock & Brown, which went down owing about $10 billion in what was Australia's biggest ever collapse, failed to excite any interest from the regulator. Nor was there any real probe into the collapse of Allco Finance despite the imploring of its liquidator. The demise of City Pacific, which torched close to $1 billion of mostly retiree's funds, had its auditors KPMG write letters on three occasions to ASIC alleging specific breaches of the Corporations Act.
Not only was nothing done, the regulator subsequently wrote private letters to some parties exonerating them of any wrongdoing.
This isn't some dim, distant period in history. This was the most recent episode of major corporate failure. So while ASIC boss Greg Medcraft is quick to talk about a change of culture within the business world, it may be best if he started with his own organisation.
The Government has been quick to deflect calls for a royal commission into banking, arguing that ASIC is better equipped to handle any investigation into wrongdoings in the finance sector.
History suggests otherwise. The Royal Commission into the collapse of HIH Insurance unearthed a mountain of damning evidence against those running the company while ASIC's poor performance as an enforcement agency punches a serious hole in the Government's argument.
That is unless Palmer manages to spur the watchdog into growing a set of teeth.
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