A Disciplinary Committee has imposed conditions on the registration of registered liquidator, Mitchell Warren Ball of BPS Recovery.
The conditions, delivered in a decision on 25 November 2019, are in summary:
Mr Ball must not take further appointments as a registered liquidator until 1 December 2020;
for the period from 1 December 2020 until 1 December 2022, all appointments he takes are joint or joint and several with another registered liquidator;
he reports to ASIC on the status of each of his appointments every six months, commencing on 20 December 2019 until 20 December 2021. The costs incurred in compliance with this condition must not be recovered from the appointments which are subject of the registered liquidator’s reports to ASIC.
The Committee’s sanctions follow an ASIC referral to the Committee about Mr Ball’s conduct in five liquidations to which he had been appointed, which in ASIC’s view, Mr Ball had not adequately explained or accounted for in 20 of the 27 concerns set out in ASIC’s show cause notice.
The Committee found Mr Ball’s conduct was serious and well below the standard expected of a registered liquidator; was not an isolated event and involved an ongoing failure to adequately and properly perform the duties of a liquidator, including to supervise his staff.
The Committee was also concerned that all five liquidations had involved replacement directors by the same initial referrer and with evidence suggesting the appointment of ‘jump-on directors’ but Mr Ball failed to ensure that a proper investigation was conducted.
The Committee found ‘Mr Ball acknowledged that although he did not intentionally do so, his actions either potentially facilitated, or could have facilitated, illegal phoenix activity. As such, his actions could have undermined the integrity of insolvency practitioners as a profession.’
Mr Ball also acknowledged that he:
failed to adequately supervise his staff;
failed to adequately investigate the affairs of the subject entity;
failed to close a bank account of the company to which he was appointed and then failed to investigate post appointment transactions;
failed to obtain the books and records and failed to request ASIC assistance; and
failed to lodge documents with ASIC.
‘The Committee’s decision sends a clear message about the duties of all registered liquidators in investigating the affairs of a company, and supervising staff in their investigations. This includes investigating the involvement of pre-insolvency advisers, changes of officers, who is controlling the changes, and importantly, for what reason,’ said ASIC Commissioner John Price.
‘Such behaviours are the minimum expected and demonstrate that registered liquidators are acting independently and competently to meet both their statutory duties and professional standards,’ Commissioner Price said.
