An ABC investigation into the activities of a number of business advisers, who help companies avoid paying millions of dollars in tax — and money owed to small mum-and-dad businesses — has uncovered a raft of potentially illegal transactions that are now the subject of investigation by ASIC and the Australian Tax Office (ATO).
Key points:
- ASIC and the ATO investigating pre-insolvency ‘business advisors’
- Advisers help failing companies escape their debt responsibilities
- ASIC and the ATO have struggled to successfully prosecute rogue advisers
The six-month investigation has uncovered three central figures in the “pre-insolvency” field, who advise a company’s directors how to strip cash and assets from the business and hide them from creditors, including the ATO.
The company is often then restarted under a different name, a practice known as “phoenixing”.
The revelations about the scale of potential illegality and fraud call into question the ability of authorities to police an area that the corporate watchdog has itself admitted is essentially unregulated.
Stephen O’Neill, convicted and jailed in 2001 for stealing from customers of his mortgage-broking business, is one of the most prolific pre-insolvency advisers in the country.
