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A founding partner of a Sydney insolvency firm will now have conditions imposed on his liquidator registration after acknowledging that his actions could have facilitated illegal phoenix activity.
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Sydney liquidator sanctioned by disciplinary committee
29 November 2019
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The Liquidator Disciplinary Committee has imposed conditions on the registration of registered liquidator Mitchell Warren Ball of BPS Recovery.
As such, Mr Ball must not take further appointments as a registered liquidator until 1 December 2020.
Further, from 1 December 2020 until 1 December 2022, all appointments Mr Ball takes will need to be joint or joint and several with another registered liquidator.
He will also need to report to ASIC on the status of each of his appointments every six months, commencing on 20 December 2019 until 20 December 2021.
The committee’s sanctions follow an ASIC referral to the committee about Mr Ball’s conduct in five liquidations to which he had been appointed, which in ASIC’s view Mr Ball had not adequately explained or accounted for in 20 of the 27 concerns set out in ASIC’s show cause notice.
Consisting of an ASIC delegate, a registered liquidator nominated by the Australian Restructuring Insolvency & Turnaround Association (ARITA) and the Minister’s delegate, the committee found that Mr Ball’s conduct was serious and well below the standard expected of a registered liquidator, was not an isolated event and involved an ongoing failure to adequately and properly perform the duties of a liquidator, including to supervise his staff.
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The committee was also concerned that all five liquidations had involved replacement directors by the same initial referrer and with evidence suggesting the appointment of “jump-on directors”, but Mr Ball failed to ensure that a proper investigation was conducted.
“Mr Ball acknowledged that although he did not intentionally do so, his actions either potentially facilitated, or could have facilitated, illegal phoenix activity. As such, his actions could have undermined the integrity of insolvency practitioners as a profession,” the committee said.
According to the committee, Mr Ball also acknowledged that he failed to adequately supervise his staff; failed to adequately investigate the affairs of the subject entity; failed to close a bank account of the company to which he was appointed and then failed to investigate post-appointment transactions; failed to obtain the books and records and failed to request ASIC assistance; and failed to lodge documents with ASIC.
“The committee’s decision sends a clear message about the duties of all registered liquidators in investigating the affairs of a company, and supervising staff in their investigations. This includes investigating the involvement of pre-insolvency advisers, changes of officers, who is controlling the changes, and importantly, for what reason,” ASIC commissioner John Price said.
“Such behaviours are the minimum expected and demonstrate that registered liquidators are acting independently and competently to meet both their statutory duties and professional standards.”
Mr Ball, a founding partner of BPS Recovery, is described as one of “BPS Recovery’s fearless leaders” on its company website.
He has over two decades of experience in the field and manages the corporate insolvency team.
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