KPMG challenges ASIC over Westpoint

Accountancy group KPMG has initiated a High Court challenge against the Australian Securities and Investments Commission (ASIC) relating to compensation for Westpoint investors.

KPMG is seeking a declaration that section 50 of the ASIC Act, which empowers the regulator to carry on a proceeding in the name of a company, is unconstitutional.

ASIC has said it would vigorously defend its position.

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The regulator said that the KPMG action, if successful, would mean ASIC was not empowered to continue compensation action against KPMG for the benefit of Westpoint investors.

ASIC began action against KPMG in October 2004 over its auditing of companies in the Westpoint Group. The action claims compensation in the order of $200 million.

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