Corporate watchdog fines White Fox, Paspaley, Steven Lew and others in reporting crackdown
It’s not just White Fox which is late on submitting its financials. Many wealthy founder families, from the son of the late Bob Jane, the Frieds and Fraids behind Harris Scarfe, Steven Lew, and the Paspaleys incurred fines.
White Fox Boutique, the online fashion retailer beloved by Instagram influencers and Gen Z, leads a list of 12 large Australian companies hit with infringement notices from the corporate regulator for failing to lodge financial reports on time.
In the case of White Fox, it is still yet to file its audited accounts.
Fashion companies are well represented on the Australian Securities and Investments Commission’s name and shame file for private businesses skirting their reporting obligations.
The family-run Paspaley pearl empire is another. The luxury jewellery company has subsequently lodged its results which showed revenue of $388m in the 2024 financial year and a profit of $28m.
The youngest son of retail billionaire Solomon Lew, Steven, appeared for his company Global Retail Brands. That entity owns well known retail names such as Robins Kitchen and House.
Global Retail Brands joins White Fox and Rodney Jane’s Bob Jane Corporation as the three companies flagged by ASIC that are still to file. While the regulator has only issued one fine to each company because of the corporate statute of limitations, the three firms risk additional penalties including the possibility of criminal action if they don’t comply.
A failure to lodge financial statements is not an indication of any corporate malfeasance and does not indicate a failure to pay tax.
The biggest company by revenue to be fined (excluding the three yet to report) was McCain Foods, which had turnover of more than $1.2bn. The frozen vegetable company previously avoided lodging its profits because of grandfathering provisions for large companies that existed before the Corporations Act was changed, but has been required to report for the past two years and has failed to do so.
It is owned by Canada’s McCain family which is presently at war with itself.
The Fraid and Fried families’ Harris Scarfe also made the list, but its stablemate retailer and crown jewel Spotlight did not appear.
Under the Corporations Act, large proprietary companies must prepare and lodge a financial report and a director’s report within four months after the end of the financial year unless ASIC has granted relief. A proprietary company is classified as ‘large’ if it meets at least two of three criteria: consolidated revenue of $50m or more, consolidated gross assets of $25m or more, or it exceeds 100 employees.
The corporate watchdog is cracking down because it believes this information should be available to potential employees, rivals, creditors and business associates.
ASIC Commissioner Kate O’Rourke said the regulator was concerned by the substantial number of companies that appeared to have not met their obligations either by lodging late or failing to lodge at all.
“Large proprietary companies are legally obliged to provide financial reports to ensure that those dealing with these businesses can make informed decisions,” Ms O’Rourke said.
Strangely, very large companies held through corporate trusts or partnerships, such as accounting or law firms including KordaMentha, KPMG, and Allens are not regulated by the Corporations Act and ASIC is unable to compel them to file.
PwC has chosen to report its earnings irrespective of the rules, a decision the company made in the wake of its tax leaks scandal. The former government consulting unit of PwC, now called Scyne, lodged its financial statements because it is structured as a company.
ASIC engaged with 217 companies in total and alleges that 70 per cent — or 151 companies — were non-compliant for one or more financial years covering FY23 and FY24. Following ASIC’s queries, 103 companies lodged outstanding financial reports, while a further 41 are in the process of doing so.
Ms O’Rourke emphasised that ASIC calls on directors of large proprietary companies and other entities with financial reporting obligations to proactively review their affairs. The crackdown netted the regulator $2.2m, the biggest of which came from a $198,000 fine imposed on MJ Bale Group.
“We also remind auditors of these entities to notify ASIC if they are aware or suspect that a company is not complying with its lodgement obligations,” she said.
The others are Adrian Norris’ Aje, Ben Young’s Frank Green Holdings, Charles Vella’s Outdoor Supacentre, Simon Crowe’s Grill’d, and the Lee family’s Bing Lee Electrics.
Originally published as Corporate watchdog fines White Fox, Paspaley, Steven Lew and others in reporting crackdown
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