Whether for reasons of modesty, camouflage or sheer laziness, the large Australian arm of French water giant Suez Environnement has chosen to describe itself as a “small proprietary company”.

That its Antipodean activities, which include the large and distressed Melbourne desalination plant, make Suez the largest PPP contractor in this country must not suit Suez’s laissez-faire approach to complying with local laws and customs.

Of course, Suez is by no means alone when it comes to this attitude cavaliere towards compliance. As revealed here over the past few months, the likes of G4S, Veolia and immigration detention mob Serco – foreign multinationals all with big government contracts in this post-colonial outpost – hardly bother either.

Since the first reports in BusinessDay early this year exposing the dog’s breakfast, le petit déjeuner de chien, that is financial reporting by big public (though not stock-market listed) entities, there has been some progress. Let’s not forget the billionaires too, for that matter.

Embarrassment in the press, rather than any exertion on the part of the regulators, seems to have had some effect. Indeed, billionaire Clive Palmer hithered forth with a flurry of financial reports which had never seen the light of day. Bravo Clive.

And Gina Rinehart’s flagship company, Hancock Prospecting, found itself in the Administrative Appeals Tribunal requesting a special exemption from the Australian Securities & Investments Commission so that it could belatedly refrain from filing its 2011 and 2010 accounts.

This was a curious predicament as neither ASIC nor the AAT had powers to retrospectively grant relief orders.

On the part of Suez Environnement though, its efforts to quietly downplay its existence in this country, in a public reporting sense at least, were shattered by the loud outcry over the desal plant and the ensuing furore over PPPs (public private partnerships).

Its joint venture with Thiess, a division of Leighton Holdings, is getting pinged by the Victorian government to the tune of $1.8 million a day in penalties. That’s for failing to deliver under the desal contract. The losses are already so heavy for the JV that they dragged down the entire Suez profit result globally – income down 82 per cent – when it reported in Paris last week.

At least, as is the case with the Ararat prison project, the state’s PPP counterparties are not defaulting. Suez is not quite as petite as it makes out for accounting purposes. But its laissez-faire compliance efforts certainly warranted further investigation.

Alas the annual financial reports of both Degremont Pty Limited (the Thiess joint venture vehicle) and Suez Environnement Australia Holdings Pty Ltd for December 31, 2011, still appear to be missing from ASIC’s public database.

Responding to questions this morning, Suez said that the Degremont accounts would be filed “in the coming weeks” – hopefully before, as the French call it, Noël. Degremont is in partnership with Thiess (40%-60%) to construct and then operate the Melbourne desal plant. The Degremont and Suez accounts were due on April 30, 2012.

Unfortunately for ASIC it cannot claim l’ignorance for the missing accounts. La Commission is both the information keeper and regulator of company laws, malheureusement.

Jeffrey Knapp, the accounting and regulation expert at the University of NSW puts it this way: “ASIC knows in a short space of time when the financial information of big Australian companies is missing from the public database.” But that knowledge doesn’t mean something will be done about it.

The odeur piquant of untimely or missing financial reports for Australia’s biggest companies is not something La Commission seems to be particularly fussed about.

Could the accounts which Suez had actually filed, in accordance with le système juridique Australien, provide any clues as to its reluctance and tardiness in lodging accounts? Were there any other irregularities?

We proceeded, as usual, to purchase at great expense from La Commission public materials which should be free as les taxpayeurs have already footed the bill for them.

Incidentally, the government and its agencies have a penchant for espousing the importance of “accountability” and “transparency” but their actions rarely match their rhetoric.

And the average person can hardly afford to fork out $54 for one company document, a document which should be free in the first place.

“Unlike New Zealand or the United Kingdom, you have to pay through the nose for company information in Australia,” says Knapp.

In any case, we appreciate that it is not de riguer for a big audit firm to dwell on such affaires petites as reporting compliance when it is busy raking in fees énormes by advising large companies on how to duck out of paying tax – but our audit firms could probably be a mite more proactive on the compliance front as well.

To be fair to Ernst & Young, which is auditor for Suez, we are certainly not discriminating between it and its rival Big 4 audit firm confrères when it comes to slacking off.

Neither did we bother with questions to E&Y as the regulation response is always, “we don’t comment on client matters’’.

It was certainly something along those lines when PwC was asked to explain how it was that it came to signing off on the Hope Downs iron ore project as a joint venture in the Rio Tinto accounts while the very same auditor found that the very same project failed to meet the definition of a joint venture in the accounts of Hancock Prospecting.

Anyway, Suez claimed to be a small proprietary company instead of a large proprietary company when lodging its 2010 financial reports. But Suez is at the head of a group with hundreds of millions of dollars in revenues and assets.

It is hardly the petite company that it makes out. Says Jeff Knapp: “Section 45A of the Corporations Act, 2001, may assist Suez in becoming au fait with the notion that they are a large proprietary company”.

Suez has also elected to refrain from presenting consolidated financial statements and its auditors have tranquilly gone along with this treatment.

According to Knapp, however, Suez should prepare consolidated financial statements:

“ASIC Regulatory Guide 85 makes it clear that the focus should be on whether the group is a reporting entity. In light of the economic significance and creditor numbers associated with the Degremont/Thiess partnerships I would have thought that a reporting entity classification for Suez was appropriate.”

Knapp’s view is supported by the fact that Suez’s subsidiary company Degremont does prepare consolidated financial statements. “When an Australian subsidiary prepares consolidated financial statements so should its Australian parent company.”

It also appears that Degremont has incorrectly classified its interests in the Degremont/Thiess partnerships – the contractors on the Victorian desalination plant.

The E&Y-audited Degremont claims that its interests in the Thiess/Degremont partnerships are jointly-controlled operations. However, the KPMG-audited Thiess Pty Limited says these partnerships are jointly-controlled entities, says Knapp.

KPMG might be the culprit behind the innovative practise of revaluing goodwill sharply higher for its multinational client G4S but it has the wood on rival E&Y when it comes to the treatment of partnerships.

The accounting standard for joint ventures requires that a venturer like Degremont disclose the aggregate amounts of current and long-term assets related to its interests in joint venture entities like the Thiess/Degremont partnerships, says Knapp.

Moreover, “Degremont may have overreached in avoiding required disclosures about the assets, liabilities, income and expenses in respect of the Victorian Desalination plant contracts held by the Degremont/Thiess partnerships”.

In another apparent oversight, the Degremont financials make no mention of any interest in the Thiess Degremont Nacap Joint Venture that is building the pipeline and power supply for the desal plant.

The annual financial report of Degremont for December 2010 includes consolidated financial statements that show revenues of $653 million on a balance sheet that is primarily cash and current receivables of $210 million and current payables of $218 million.

“It is an interesting set of accounts” says Knapp. “There is a lot of revenue given a net liability position of $8 million payable.”

There is no mention in the Degremont accounts of an interest in a long-term construction contract. “More information in the accounting policy note on the accounting for the Degremont/Thiess partnerships would be useful,” says Knapp.

The accounting suggests that the construction contract for the Victorian Desalination plant may be quite generous. “The contract costs seem to be getting monetarised into billings and cash quite quickly.”

No doubt the contractors have a better deal for getting paid than the Australian public has for getting access to financial information that is already supposed to be on the public database.

And no doubt the Institute of Chartered Accountants is working assiduously behind the scenes to ensure that the big audit firms are doing their bit to rescue financial reporting and compliance in this country from farce.