Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Hansard source

As I said in response to Senator Sherry’s question, it is very important to understand that ASIC does not prudentially regulate companies such as Westpoint. Westpoint directors were providing statements that Westpoint was solvent as late as 2005, and Westpoint’s auditors were at the same time providing unqualified financial statements for the Westpoint entities. Once ASIC had appropriate evidence in late 2005, it successfully took action to stop Westpoint from operating further.

These matters are under investigation by ASIC, and it is important that these investigations take their course. As I have said, there are a number of steps that have been taken in relation to ASIC’s investigation of both Westpoint and the matters relating to the audited accounts or the state financial statements. It is important that the investors have been kept advised, as I mentioned in answer to the previous question. ASIC started a general campaign back in 2003 to warn investors against the risks of investing in high-yield debentures. It is important to understand that ASIC has done what it possibly can to be able to take action in relation to these matters and in relation to investigating Westpoint. Recently, the Federal Court ordered the winding up of the parent company in the Westpoint group, Westpoint Corporation Pty Ltd, following an application by ASIC. It was a crucial step in preserving the assets and will be a crucial step in enabling investigations to be undertaken of the kind to which Senator Wong alluded in her question.

It is important to inform the Senate that on 31 March ASIC made an urgent application to the Federal Court to obtain orders freezing the personal assets of Mr Carey, Mr Beck and two other directors. It was based on the results of investigations indicating that these persons had taken actions designed to diminish the assets. The court has now appointed receivers of the personal assets of the individuals named. ASIC continues to investigate all the enforcement options open to improve the return to investors, and there is the possibility of both civil and criminal action in relation to the conduct of the Westpoint advisers and directors, including the group’s auditors, KPMG.