Amongst the huge number of statistics published by the Australian Securities and Investments Commission (ASIC) in its latest report on corporate insolvency is the finding that in 2014/15 liquidators, receivers and voluntary administrators (external administrators) reported 16,279 apparent or possible breaches by directors and others of the laws in relation to companies. (Notes 1 & 2)
The statistics are in ASIC Report 456, Insolvency Statistics: External Administrators’ Reports (July 2014 to June 2015), released on 17 November 2015.
During each year external administrators lodge reports with ASIC as required under the Corporations Act 2001. The main purpose of the reports (in ASIC Form EX01) is to provide a means by which external administrators can fulfil their statutory obligation to report corporate offences that appear to have been committed by directors of the company, and misappropriations, negligence, breaches of duty, breaches of trust, etc., that appear to have been committed by persons who have taken part in the formation, promotion, administration, management or winding up of the company. (Note 3)
Table of breaches reported
Of the 16,279 reported breaches in 2014/15, ASIC has decided to categorise and specify 12,275. This is the number of breaches in respect of which external administrators have stated that they have supporting documentary evidence. (Note 4)
I have compiled the following special table of details of these 12,275 alleged breaches. (Note 5) As can be seen, the three most common offences are insolvent trading (29.6%), failure to keep financial records (16.6%) and failure to exercise care and diligence (15.5%).