ASIC announced that has commenced civil penalty proceedings in the Federal Court of Australia in Melbourne against Patrick John Godfrey, former managing director of Banksia Securities Limited (In Liquidation).
ASIC alleges that:
- Banksia’s financial reports for the financial years ending 30 June 2011 and 30 June 2012, and the half-year financial report for the half year ending 31 December 2011 did not comply with the relevant accounting standards, nor did they give a true and fair view of the financial position and performance of Banksia, given the amount disclosed for the provision for impairment of receivables was significantly less than it ought to have been;
- Mr Godfrey did not have, and failed to obtain, a proper understanding of the requirements of the relevant accounting standard, AASB 139 Financial Instruments: Recognition and Measurement (AASB 139) as it applied to the determination of:
– the value at which a loan or receivable was to be recognised in Banksia’s financial reports; and
– whether or not there was objective evidence that a loan or receivable was impaired; and, if so,
– the proper amount of any provision for impairment.
- Mr Godfrey calculated and approved the impairment of receivables for Banksia and, as a consequence, Banksia’s financial reports failed to give a true and fair view of Banksia’s financial position;
- Mr Godfrey failed to take all reasonable steps to secure compliance by Banksia with AASB 139.
ASIC is seeking declarations from the Court that Mr Godfrey contravened section 344(1) of the Corporations Act. ASIC also seeks orders for the imposition of a pecuniary penalty upon Mr Godfrey and for his disqualification from managing corporations.
The Federal Court will hear the matter at 10.15am on 3 August 2017.
To see the complete announcement, click here.