ASIC fails to prosecute a single builder suspected of insolvent trading, despite ‘devastating’ impact on home owners

By investigative reporter Amy Greenbank ABC News

Posted Yesterday at 5:38am, updated Yesterday at 10:02am

Hundreds of failed construction companies are suspected of insolvent trading, but not one has been prosecuted by the watchdog responsible for holding them to account.

Key points:

• No criminal or civil action had ever been taken against a builder over insolvent trading by ASIC
• The regulator says it will only act when there is sufficient evidence, and it will "benefit the general public"
• A parliamentary inquiry is currently scrutinising whether ASIC is slow to act and failing to protect "ordinary Australians"

The latest figures show three in four — 682 out of 919 — that folded in the 2021-22 financial year alone were suspected of insolvent trading, according to initial reports lodged by external administrators with the Australian Securities and Investments Commission (ASIC).

Despite the figures, an ASIC spokesperson admitted no criminal or civil action had ever been taken against a builder or construction company director in Australia over the misconduct.

"What message does it send when there is nobody being prosecuted?" Geoffrey Watson SC, a former counsel assisting NSW's Independent Commission Against Corruption, said.

"It's devastating for homebuyers and for subcontractors, many of which are small with limited working capital," Mr Watson, who is now a director at the Centre for Public Integrity, said.

Home owners left in limbo

One of those home owners is Christine Tugwell, whose builder went under in May, with the company's liquidator finding it had likely been trading insolvent for "at least six months".

Ms Tugwell said the building franchise, Stroud Homes Northern Rivers, asked her to make extra payments in the months before it entered liquidation, and she had to borrow money from a relative to cover the unexpected cost.

Read the article in full (no paywall)

SubbiesUnited Note:

We have been saying this for years, despite obvious corruption and despite close to a billion dollars of subbies money pissed up against the wall by crooked builders, there have been no charges laid by this useless bunch of nobs in suits and white shirts who succle on the public teat!

Obviously hundreds of thousand Australian subbies don't count in regard to ASIC's public interest criteria. They are running a protection racket for crooked directors.

They are spineless.