ASIC winds up several companies owing more than $410,000 in employee entitlements

From 1 January 2019 to 31 March 2019, ASIC appointed liquidators to five abandoned companies owing at least 39 employees more than $410,000 in employee entitlements. 

The companies are NISS Technologies, Jovawill, Rushci, Steel Project Services and Surat Basin Group.

Abandoned companies are those where directors are unable to discharge their duties or have abandoned their insolvent companies without first putting them into liquidation.

ASIC’s appointment of liquidators facilitates access to FEG for employees who would otherwise be ineligible to apply for assistance.

The appointment of liquidators also allows a full and proper investigation into the reasons why the companies failed and may assist the recovery of any voidable or unreasonable director-related transactions. In addition, abandoned companies may be an indicator that the director has engaged in illegal phoenix activity.

ASIC first used its powers in 2013 and to date has wound up 115 companies owing approximately 305 employees more than $6 million in employee entitlements. It will generally not wind up an abandoned company where the total amount of outstanding employee entitlements is less than $15,000.