Federal Tasmanian Liberal Senator John Watson has asked the Australian Securities and Investments Commission (ASIC) to account for its lack of action in the lead up to the recent collapse of the Westpoint group.
In a recent speech Watson made to the Senate President, he question why the regulator took no action against the failed corporation, even when concerns over the company’s operations were being circulated in public.
“In 2004 KPMG, after extensive and appropriate audit work, issued unqualified audit reports, but … ensured that for relevant companies, the notes to the accounts properly disclosed going concern issues in respect of those things,” Watson said.
“Where was ASIC in relation to those concerns raised by the auditors? I think they should have picked up on this — they were asleep at the wheel — whether or not they were strictly required to do so,” he added.
The Senator from Tasmania also criticised ASIC for its response to an investor who tried finding out directly from the corporate watchdog in August 2005 whether or not Westpoint was a good investment before allocating funds to the failed company.
“ASIC would not comment either way. They did not know. They were not prepared to say. They sat on the fence and allowed people to lose savings of that [non-recoverable] nature,” Watson said.
He also felt the regulatory body needed to do more to prevent unlicensed individuals from providing advice of a financial nature.
“That people posing as financial advisers can so cynically lie to people, knowing they’re giving their clients’ retirement savings away for a commission … ought to be stopped,” Watson demanded.
“I urge ASIC to take immediate action against these so-called unlicensed advisers. I ask: What were the great numbers of lawyers in ASIC doing to protect the people? The situation is not good enough. It is neglect of duty,” he said.
