Fed: ASIC bares its teeth and chases the big fish

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Fed: ASIC bares its teeth and chases the big fish

By Jim Hanna, Economics Correspondent

CANBERRA, AAP - Either Australia's corporate cops are getting tougher or corporatecrooks are getting busier.

Whichever way you look at it, the Australian Securities and Investments Commission(ASIC) has bared its teeth and cranked up its enforcement activity over the past few years.

Just ask Nicholas Whitlam, Rodney Adler, Rene Rivkin and the flamboyant Karl Suleman,dining chum of former US president Bill Clinton.

Australia's army of new shareholders should be pleased; ASIC is going after the bigfish, the high-profile corporate chiefs whose shenanigans affect the investments of thousandsof ordinary people.

It makes a refreshing change from the small-time car dealers and insurance salesmenASIC normally chases (although just this month, action was taken against a South Australiancar dealer and a Tasmanian insurance adviser was jailed for six years).

ASIC investigations have led to 69 corporate criminals being jailed for up to 229 yearsover the past three years.

Another 111 defendants are before the courts facing criminal charges and 20 are facingcivil proceedings, including One.Tel joint managing directors Jodee Rich and Bradley Keeling.

ASIC wants the Supreme Court to disqualify messrs Rich and Keeling from managing orbeing directors of any company.

Last financial year, 17 company directors and officers were banned from holding office,including froggy.com founder Karl Suleman who operated an unregistered managed investmentscheme while unlicensed.

Suleman's company, Karl Suleman Enterprises (KSE), raised more than $130 million fromabout 2,000 investors, mainly from Sydney's Assyrian community.

But the company was placed in liquidation in November last year leaving creditors morethan $80 million out of pocket.

The government has been keen to highlight ASIC's enforcement activity as it fends offLabor claims it is reluctant to get tough with corporate wrongdoers.

In parliament today, Treasurer Peter Costello reeled off a list of offenders nailedby ASIC recently, including former Harris Scarfe chief financial officer Alan Hodgsonwho was jailed for six years.

Former HIH director Rodney Adler was banned from company management for 20 years andordered to co-pay $7 million in compensation, Mr Costello said.

"(HIH chief executive) Ray Williams was banned from company management for 10 years,and ordered to (co-)pay $7 million compensation," he said.

"(Former NRMA president) Nicholas Whitlam was banned from being a company directorfor five years and ordered to pay penalties of $20,000."

Some of those people were appealing, Mr Costello said.

He said the government boosted ASIC's funding by $90 million over four years in recognitionof its increasing case load.

AAP jph/mg/br

KEYWORD: ASIC (AAP BACKGROUNDER) (WITH FACTBOX) (RPT)