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Lawyer says you can appoint an accountant to help or advise, but you cannot contract out company directorship obligations.



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JOHN HIGHFIELD: Well, it appears Parliamentary Secretary, Warren Entsch, could be heading deeper into trouble. On AM this morning, the junior government frontbencher admitted in an interview that he handed over his responsibilities as a company director and secretary to his accountant. But the Australian Securities and Investment Commission has warned that it's illegal under Corporations Law to contract out your position as company secretary. In Canberra, Mark Willacy.

 

MARK WILLACY:  After surviving a torrid week in parliament, Warren Entsch is back working his Far North Queensland electorate, and Labor is continuing to equivocate on the viability of a High Court challenge to Mr Entsch's position. But in a bid to head off any further controversy over his business interests, the Parliamentary Secretary told AM this morning that he was restructuring his role with his companies. In fact, Mr Entsch thought he'd already distanced himself enough from this business holdings to avoid any allegations of conflict of interest.

 

WARREN ENTSCH:  When I got into the parliament, all of my companies that I have an involvement with, I had handed over the responsibilities with regards to directorships, et cetera, to my accountant. He accepted those responsibilities and, in doing so, I assumed that it was an appropriate way to deal with it.

 

ALEXANDRA KIRK: So in this case, your understanding was that the accountant was actually looking after the secretary duties of Cape York Concrete?

 

WARREN ENTSCH:  He was. It's not an understanding - I mean, he was. In fact, he was doing it on all companies.

 

MARK WILLACY:  If his accountant has taken over Mr Entsch's responsibilities as company secretary in two of his businesses, it could provide more headaches for the Howard government. Michael Gething, is the senior lawyer with the Australian Securities and Investment Commission's Western Australian office.

 

MICHAEL GETHING:  Well, perhaps the simplest way to understand the role of a company secretary is that their responsible for the housekeeping functions of the company. Under the Corporations Law, there are a number of obligations by way of housekeeping on a company director such as making sure that the company name is displayed outside the office, making sure that the Australian company number is on all the documents, and keeping registers. So they are the sorts of things that a company secretary needs to look out for.

 

MARK WILLACY: Would you describe that role as a hands-on, day-to-day sort of a role?

 

MICHAEL GETHING:  It is a hands-on, day-to-day role, but obviously the nature of the obligations required will depend on the business activities of the company.

 

MARK WILLACY: Can you, say, as a company secretary, appoint your accountant, for example, to handle your responsibilities on your behalf?

 

MICHAEL GETHING:  You can appoint your accountant to help and advise, but you can't contract out of your obligations.

 

MARK WILLACY: So it's not appropriate for someone to, say, appoint and pay their accountant on their behalf to take over those responsibilities which are spelt out in the act?

 

MICHAEL GETHING:  It just depends on the circumstances of the case and the nature of the agreement that they enter into. At the heart of it, there are statutory … if you are the company secretary, you are the person who is responsible under the Corporations Law for complying with the obligations on the company secretary, and that's something that you can't contract out of.

 

MARK WILLACY: So you can't pass that on to your accountant, for example?

 

MICHAEL GETHING:  Well, no, you can't pass it on to anyone.

 

MONICA ATTARD:  Michael Gething who is a senior lawyer with the Australian Investment and Security Commission.