The Australian Institute of Company Directors today indicated its strong support for the introduction of Director Identification Numbers (DINs) and tougher penalties in order to tackle damaging illegal phoenix activity.
Phoenix companies 'rise from the ashes' with a new corporate structure that derives its assets and directors from an old entity, but improperly leaves behind its debts.The Federal Labor Opposition today proposed the introduction of DINs, which was also recommended by the Productivity Commission in 2015. The Opposition has also proposed stronger penalties for illegal phoenix activity.AICD Chairman Elizabeth Proust AO said the AICD supports effective measures to tackle illegal phoenix activity and punish those behind such economically damaging behaviour.
“The vast majority of Australia’s 2.5 million directors govern their companies with integrity and accountability,” she said.
“Unfortunately, fraudulent phoenix activity by a small number of people hurts the economy, employees and creditors. It is imperative that anti-phoenix laws be effectively designed and enforced.
“We look forward to consultations around the model that the Opposition has proposed, including its potential privacy and administrative aspects.
“It is also important that anti-phoenix measures are structured so that they target those doing the wrong thing, without limiting legitimate business restructures which benefit employees, creditors, and the economy generally.”
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