No accounts, no worries: companies thumb nose at ASIC

by | Mar 22, 2012 | Business

Serco Australia, the company which incarcerates refugees on behalf of the Commonwealth, enjoyed a tidy doubling in profits to $40 million the year before last.

Yet despite its billion-dollar detention centre deal with the government, Serco can’t manage to comply with the Corporations Act and file its accounts on time. And this is the local arm of a top 100 company listed on the London Stock Exchange.

Following revelations earlier this week that financial accounts for companies owned by billionaires Clive Palmer and Gina Rinehart are missing, a BusinessDay investigation shows a raft of multinational companies with large government contracts have also failed to file their financial reports.

Some, like Serco, are chronic late filers. Others have failed to comply at all. Their accounts are simply invisible to the naked eye. No explanation. No regulatory action either.

According to a source who monitors compliance, some of the largest non-listed companies operating in sensitive industries such as gambling, water, prisons, transport and health have either failed to lodge any accounts at all or habitually lodge months or years after the statutory deadline.

“The failure of Rinehart and Palmer companies to file accounts with ASIC in a timely manner is just the tip of the iceberg,” said the source, preferring to remain anonymous.

“I am aware of literally hundreds of large proprietary companies that should file within four months of year end but either do not file at all or are late in filing. This includes some of the largest and most prestigious privately-owned or foreign-owned companies operating in Australia.”

Australian Correctional Facilities Pty Ltd, which runs Port Phillip prison in Victoria, has not lodged accounts for three years. Victorian lottery services provider Intralot Australian Pty Ltd is regularly months late.

Veolia Water and United Water International have two years of missing accounts apiece while another foreign beneficiary of government water contracts, the Australian holding company for French Suez Group in Australia, is regularly months late.

One of the reasons the disclosure laws are in place is to protect creditors and staff of big private companies. Reed Constructions Australia Pty Ltd, for instance, had not lodged last year’s accounts until this week. They were five months late and, in the meantime, the company had hit the wall, leaving its creditors in the lurch despite having booked substantial revenues from the government’s school building program.

The thousands of sub-contractors owed $80 million by Reed could have prepared for the worst five months ago had Reed been forced to comply with the disclosure laws.

Bernie Ripoll, the new Parliamentary Secretary to the Treasury who oversees corporate regulation, said earlier this week in response to the Clive Palmer story that he was confident that all company directors would be made to “fulfil their full responsibilities”.

“No one is above the law. Everyone, every company, every organisation, is expected to meet their responsibilities,” Ripoll said.

“The law is absolutely clear and ASIC is the regulator. I am very confident that the regulator will use all of its resources and all of its powers to make sure (company directors) fulfil their full responsibilities”.

The law says that a big proprietary company has to file accounts within four months of balance date.


Michael West

Michael West

Michael West established 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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