Minister backs ‘error’ explanation

by | Jun 15, 2010 | Business

The government and the corporate regulator would not say last night whether, because of a ”technical error”, they would be conducting a nationwide recall of Australian Securities and Investments Commission gazettes published over the past decade.

BusinessDay reported last week that ASIC had purged hundreds of exemption orders from its public database this year, coinciding with the senate inquiry into liquidators. Most, though not all, of the purged information related to exemptions from filing company reports that the regulator had granted to liquidators and administrators.

The importance of such information is that shareholders and creditors must be able to access company accounts and other statutory disclosures when a company has failed, or is being reinvented by liquidators during the insolvency process.

In response to suggestions that it was doing liquidators a favour while burying embarrassing public information, ASIC responded that the information should never have been up on its website in the first place and was only there because of a ”technical error”.

This apparent and long-standing ”technical error” had occurred even though there are clear provisions in the Corporations Act saying ”ASIC must cause a copy of an exemption to be published in the gazette”.

The Corporate Law Minister, Chris Bowen, backed ASIC’s ”technical error” claims yesterday.

ASIC has been publishing exemptions not only online but also in hard copy for at least seven years, meaning a recall from the nation’s public libraries and other institutions may be needed. When this was put to the minister’s office and ASIC last night neither was available for comment.

In a letter to the Herald, ASIC’s chief legal officer, Michael Kingston, said last week that orders granting relief under section 340 of the Corporations Act were not meant to be made publicly available.

”However, due to a technical error, these documents were able to be accessed through ASIC’s public register. When this error was detected, reference to the documents was removed from the register.”

A spokesman for Mr Bowen said: ”The government is satisfied the removal of reference to the documents from ASIC’s public database had no connection with the senate inquiry [into liquidators].”

Neither ASIC nor Mr Bowen’s office answered questions about the amount of information purged from the regulator’s website, nor did they identify any or all of the companies involved. The government did not respond to questions about its policy on deleting information from public databases.

ABOUT THE AUTHOR

Michael West

Michael West

Michael West established michaelwest.com.au to focus on journalism of high public interest, particularly the rising power of corporations over democracy. Formerly a journalist and editor at Fairfax newspapers and a columnist at News Corp, West was appointed Adjunct Associate Professor at the University of Sydney’s School of Social and Political Sciences. You can follow Michael on Twitter @MichaelWestBiz.

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