ASIC FRAMEWORK Name of the Student Name of the University Author Note

Running head: ASIC FRAMEWORK
ASIC FRAMEWORK
Name of the Student
Name of the University
Author note

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ASIC framework
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Conclusion..................................................................................................................................7

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Introduction
Disciplinary committee cancels liquidator David leigh’s registration
The registration of a liquidator named john leigh has been cancelled by a disciplinary
committee on the ground that Mr. leigh had acted immorally in arranging the transfers of
$800000 from a liquidation bank account into a bank account that has been controlled by him
and that he was not considered to be a correct person to be registered as a liquidator. The
Australian insolvency law is mainly governed by the corporation act 2001 as per that law the
liquidator must be a member of the institute of chartered accountants of Australia or CPA
Australia and should possess a certificate of liquidator.
The committee was held on January 2 2019 after Mr. leigh, the former liquidator of
Neolido holdings did not give answer to the show cause sent to him by ASIC on 13
November 2018 in which the committee asked Mr. leigh to give a written explanation why
his liquidator registration should continue.
Discussion
Legal rules that are applicable in this case
The ASIC has imposed a civil case against Mr. leigh for fraud case and impose the
clause of section 408C(1)(D) of the criminal code 1899 following him entering a plea of
guilty to these offences. The insolvency law of Australia is also applicable for this case. The
insolvency law provides certain provisions that disqualify a liquidator from carrying the

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practice as a registered liquidator. The liquidator must not use the advantage of his position
and should not indulge any kind of fraud case1.
The corporation act 2001 provides that a liquidator is not required to incur an expense
in relation to the winding up unless there are enough assets to pay their costs. The liquidator
should not make any transaction from its own bank account and a separate bank account
should be there through which all the transactions during the time of liquidation should be
made.
Under section 40-550(1)(c) the registration of David john leigh should be cancelled,
in addition to that section n40-55(1)(g) provides that it is required to impose condition on all
the other liquidators to prevent Mr. leigh from conducting any function or duties as a
liquidator of any company, the section provides a ban of 8 years on Mr. leigh from the date
on which it has been decided that Mr. leigh has been found guilty for forgery.
The reasons of such ban on Mr. leigh
The ASIC has point out several legal issues on Mr. leigh which are stated below
Mr. leigh not being a registered liquidator continue to act as liquidator, as it has been
found that Mr. leigh has applied for suspension of his registration and his registration was
cancelled on march 2 2018.
Mr. leigh was the liquidator of Neolido holdings pty ltd CAN 102472015 on 25
November 2005 Neolido was wound up. From 14 October 2010 to 26 February 2018 Mr.
leigh while a partner of ppb advisory was one of the two liquidators of Neolido together with
one of his partners in ppb advisory. During that period Neolido has no other liquidator2.
1 "ASIC Home | ASIC - Australian Securities And Investments Commission", Asic.Gov.Au (Webpage, 2019)
<https://www.asic.gov.au/>.
2(2019) <https://scholar.google.co.in/scholar?
hl=en&as_sdt=0%2C5&as_ylo=2015&as_vis=1&q=asic+implementation&oq=ASIC>.

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Neolido had an account with the common wealth bank and all the transaction of the company
were made through that bank.
CCA financial services pty ltd was a secured creditor of Neolido.
CCA had also an account in the commonwealth bank of Australia.
Mr. leigh was a director leigh farm investment pty ltd. The farm was established on
19 June 2002 in which Mr. and Mrs. leigh were appointed as directors. According to Mr.
leigh his wife resigned as director and leigh farm has no other directors. All the shares of the
farm were held by Mr. leigh and members of his family3.
Leigh farm had a bank account in bank of Queensland.
The farm had made transactions from 25 July 2017 to 9 November 2017 a total amount of
$800000 which was transferred from Neolido to the leigh farm account in the following way
$250000 on 25 July 2017
$450000 on 11 September 2017 and
$100000 on 9 November 2017
On 21st February a legal representative of ppb advisory contacted ASIC and advised
ASIC to inspect on such transaction as these transactions were made fraudulently and that
Mr. leigh the director of leigh farm has been solely responsible for all these fraudulent
transactions.
After inspecting the unauthorized transactions ASIC ahs send a legal notice to Mr.
leigh and asked for an explanation of such act and why his liquidator registration should
3 (2019) <https://asic.gov.au/about-asic/asic-investigations-and-enforcement/asic-s-approach-to-enforcement/>.

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continue4. In short, the show cause notice states that the according to ASIC Mr. leigh has
been found guilty for the following reasons:
He has contravened the provision of section 184(2)(a) of the ASIC act because as a
liquidator of Neolido he has immorally engaged in the transfer of funds on which he has no
authority.
He has contravened 1307(1) and 1308(2) of the act because to fraudulently transfer
the fund he amended an email that he received from CAA the creditor of Neolido to give the
appearance that CAA had given certain payment instruction which they had not actually
given. And had created internal payment instruction to PPB advisory staff to give the
appearance that by following those instructions, payment would be made to CAA when in
fact they would be made to the leigh farm5.
The ASIC has made it clear that Mr. leigh was not fit and proper person to act as a
liquidator. ASIC has found Mr. leigh guilty for the contravention of the following sections
Section 184(2)(a)
Under section 184(2)(a) of the act
A director other officer or employee of a corporation commits an offence if they use
their position dishonestly with the intention of directly or indirectly taking monetary
advantage from any transaction which causes detriment to the corporation.
Under section 9 of the act officer of a corporation means a liquidator of the
corporation Mr leigh being a liquidator of the corporation will be treated as a officer.
4 "ASIC Home | ASIC - Australian Securities And Investments Commission", Asic.Gov.Au (Webpage, 2019)
<https://www.asic.gov.au/>.
5 "19-104MR Former Liquidator David Leigh Sentenced To Seven Years Imprisonment For Fraud | ASIC -
Australian Securities And Investments Commission", Asic.Gov.Au (Webpage, 2019) <https://asic.gov.au/about-
asic/news-centre/find-a-media-release/2019-releases/19-104mr-former-liquidator-david-leigh-sentenced-to-
seven-years-imprisonment-for-fraud/>.

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A conduct should be treated as dishonest if it would be regarded as dishonest by the
standards of the ordinary dishonest people6.
The effect of the transfer of fund was to enrich the Mr. leighs family company at the
expense of CAA. To ensure the transfers to occur Mr. leigh
Lied to the representative of CAA
Lied to the staff of PBB and
Signed a document that create a false impression of the transaction that they recorded
Those acts of Mr. leigh would be regarded as dishonest act by the standard of the
ordinary, decent people, and so the ASIC find that buy causing the transfer Mr. leigh used his
position as liquidator of Neolido dishonestly7.
Mr. leigh acted intentionally to make the transfer happened and thereby has taken
monetary advantage for himself.
In view of all these acts as empowered by the provision of the ASIC act for the
contravention of s184(2) the committee found Mr. leigh guilty for fraudulent transfer of
funds.
The ASIC regulate Australian companies, financial markets, financial services
organizations and professionals who deal and advice in investment, superannuation,
insurance, deposit taking and credit8.
The ASIC by imposing severe charges on Mr. leigh for breaching the provision laid
down by the provision of the ASIC act. the role of the ASIC ensure that the licensees meet
6 David Zimmerman, "‘A More Creditable Way’: The Discovery Of Active Sonar, The Langevin–Chilowsky
Patent Dispute And The Royal Commission On Awards To Inventors" (2017) 25(1) War in History.
7 (2019) <https://ieeexplore.ieee.org/abstract/document/8051120>.
8(2019)<https://opus.lib.uts.edu.au/bitstream/10453/44104/4/BF63BA93-936A-47B8-8B2A-
87CF1D575895%20am.pdf>.

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the standards including their responsibilities to consumers that are set out in the national
consumer credit protection act 2009.
As a market regulator ASIC has taken all the necessary actions against the fraudulent
activity of the Mr. leigh. The committee has banned the registration of leigh and prevent him
from carrying on practice as a registered liquidator9.
The ASIC is empowered with several powers which includes the cancellation of the
registration of the liquidator in case any serious allegation has been proved against the
respective party. The section 40-55(1)(c) empowers the ASIC to cancel the registration of
Mr. leigh so that he did not engage in such kind of practices in the future and does not crate
an adverse effect on the liquidation process of other company. The ASIC further warns the
other practitioner not to take leigh as there partner in any farm and should prevent leigh from
doing practice10.
Section 40-55(1)(g) further empowers ASIC to impose a condition to all other
registered liquidators that they must not allow Mr. leigh to carry out any of the functions or
duties or exercise any of the powers of a registered liquidator on their behalf for a period of 8
years commencing on the date that this decision is made11.
The ASIC has the power to publish this report in public.
Since the occurrence of the Hayne royal commission case the ASIC started to impose
strict rule on all the concerns that are directly related with the business of rendering financial
9(2019)<https://minervaaccess.unimelb.edu.au/bitstream/handle/11343/191832/An%20Analysis%20of
%20Penalties%20under%20ASIC%20Administered%20Legislation%20
10 Kevin Davis, "The Hayne Royal Commission And Financial Sector Misbehaviour: Lasting Change Or
Temporary Fix?" (2019) 30(2) The Economic and Labour Relations Review.
11 "The Economic And Labour Relations Review: SAGE Journals", SAGE Journals (Webpage, 2019)
<https://journals.sagepub.com/home/elr/>.

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services. ASIC banned 132 people from providing financial services or being company
directors over the last six months which jumped from 88 in the last year12.
The imposition of 8 years ban on Mr. leigh proves that ASIC will not neglect any
misconduct by any professionals and will take vicious actions if any of the provisions of the
ASIC act has been violated by any of the professional person.
Conclusion
In conclusion it can be said that after the occurrence of the royal commission case the
ASIC become very strict about the imposition of rules and regulations and the regulatory
body will not tolerate ant violation of the actions that will go against the public interest.
Bibliography
Carter, J. W, Carter's Guide To Australian Contract Law
12 Andrew C. Worthington, "Financial Literacy And Financial Literacy Programmes In Australia" [2016]
Financial Literacy and the Limits of Financial Decision-Making.

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Australian Corporations & Securities Legislation (CCH Australia, 1994)
Case laws
ASIC v vines
Legislation
Corporation law