The PricewaterhouseCoopers (PwC) report released today, commissioned by the
Government’s Phoenix Taskforce, found that the direct impact of illegal phoenixing activity is
between $2.85 and $5.13 billion per year to Australia’s economy. This highlights the need for
urgent action on this issue.
The AICD has previously supported the establishment of an anti-phoenixing hotline as it has
the potential to yield useful information beyond information provided by liquidators to ASIC
under the Corporations Act 2001.
AICD Managing Director & CEO Angus Armour said the AICD strongly supports the
government’s aim of deterring and disrupting phoenixing activity.
“Employees, creditors and stakeholders pay the price when unscrupulous individuals misuse
the corporate form to strip assets from one company to another to avoid paying entitlements
and liabilities. The practice also damages confidence in the corporate model, to the detriment
of the vast majority of responsible businesses and directors,” he said.
“For that reason the AICD welcomes the establishment of a new anti-phoenixing hotline and
website to assist regulators in targeting and prosecuting illegal activity.
"In order for these measures to be effective, the agencies responsible for taking action must
be appropriately resourced, and willing, to act.
“We would also welcome periodic reporting of the volume and nature of reports provided via
the hotline, together with statistics on the enforcement action taken in response.
“Effective laws, vigorously enforced, with impactful and proportionate sanctions, are vital in
combatting these destructive illegal activities.”
The AICD also supports the introduction of Director Identification Numbers (DINs). The
effective implementation of DINs would make it easier for regulators and other stakeholders
to track the corporate history of individual directors and further support targeted anti-
phoenixing measures, while also addressing cybersecurity and privacy concerns.
We note that as with any electronic identification system, information confidentiality and
security issues will be of paramount importance in implementing the DIN regime.
Media Contact: Carissa Simons 0417 348 659
The Australian Institute of Company Directors is committed to excellence in governance. We make a positive impact on society and the economy through governance education, director development and advocacy. Our membership of more than 41,000 includes directors and senior leaders from business, government and the not-for-profit sector.