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Thursday, 25 November 1993
Page: 3751


Senator O'CHEE (5.18 p.m.) —The Australian Securities Commission has produced a marvellously glossy annual report. If honourable senators read this annual report they would think that there was nothing wrong with corporate regulation in this country. How mistaken they would be! In this annual report the ASC seeks to trumpet some of its great achievements—for example, the regulation of corporate matters and bringing people who have defrauded the public or acted improperly to heel. On page 30 of the annual report, for example, it lists as one of its successes the prosecution of one Mr David Howe, a director of a company called Farndale Ltd. It says that he was:

. . . sentenced to two years imprisonment, minimum term of eight months, on charges relating to the improper use of his position to gain an advantage for Howe Corporation Pty Ltd. Solicitor, Nigel Smith, was sentenced to two years imprisonment, minimum term of nine months, for being knowingly concerned in the commission of an offence. John Campbell was fined $17,500 and ordered to perform 240 hours of community service after pleading guilty to improperly using his position as a director of the company.

What this annual report does not tell us is that Farndale and the Howe Corporation collapsed in 1987 and 1988 respectively; that these matters are over five years old; that the offences in question occurred before the collapse of the companies—and this is one of the great achievements of the Australian Securities Commission and, before it, the Corporate Affairs Commission!

  What we have here is a joke. This is not proper corporate regulation. Anybody can take a charge that relates to a matter over five years old and say it is a success because they finally got it resolved this year. The real test of the success of the Australian Securities Commission is how well it is regulating corporate misconduct at the moment.

  Unfortunately, six months ago the Senate Standing Committee on Legal and Constitutional Affairs was forced to come to this chamber and seek a reference to look into the manner in which the ASC exercises its investigative powers. We have received over 108 submissions on that inquiry and the submissions continue to come in to this day. Every week we get more submissions from people who have been aggrieved by the Australian Securities Commission. Most of those submissions are not from the crooks and the villains and the scoundrels trying to cover up what they have done; many of those submissions come from the victims of corporate misconduct whom the ASC has attacked when it should have been attacking the perpetrators of these offences in the first place. Many of those submissions come from people who had ASC officers knock on their door at 7.30 or 8 o'clock at night to deliver documents that related to their being required to appear in court the very next day to defend their own private assets from applications by the ASC to have those assets frozen. These were the victims of the rip-offs, not the perpetrators.

  We were supposed to have our first hearing next week in Brisbane—because of the work load of the committee this was six months after the legal and constitutional affairs committee received this reference—but it was suggested that this hearing be cancelled while we go off and have a hearing on another matter which has been referred to us at short notice. That makes me angry enough as it is.

  But what makes me really angry is the fact that the Australian Securities Commission recently approached the secretary and other staff of our committee and sought to have a private meeting with them, not with the committee. It was told, quite correctly, that if it wanted to meet with anybody it would meet with the committee, and it would do so in public. It declined that offer. The really sad thing is that those officers of the ASC who sought to do that made the approach after having just attended a conference on the privileges of the Senate committee system, which they were forced to go to because of their previous misconduct. What did they have to say to the committee secretariat that they cannot say to the members of the committee themselves? What do they want to say about us that they do not want to say in public? The ASC is rotten right the way through. Unless I see something to the contrary, I will have to believe that.