ASIC predictions are off the mark in FOFA saga

LOST: One crystal ball, doesn’t work properly. If found, please return to ASIC poste restante for Greg Medcraft, who will pick it up when he gets back from his latest overseas trip.

With the Senate on Wednesday night leading Finance Minister Mathias Cormann’s regulations watering down Future of Financial Advice rules to their doom, like Lambies to the slaughter, ASIC has decided it won’t strictly enforce the law until July 1 next year.

Perhaps a strange choice for a regulator, but not a new one: it did the same thing, allowing industry a grace period to adjust, when the legislation was first introduced.

And after the ALP was booted out last year, ASIC went further, pointing out that the then finance minister — Arthur “ICAC” Sinodinos — planned to repeal bits of FOFA.

ASIC was so confident that the law would change that on December 20 it promised not to “take enforcement action in relation to the specific FOFA provisions that the government is planning to repeal”.

Eventually, Cormann got his measures through as regulations as part of a deal with Clive Palmer’s Palmer United Party.

The wheels fell off that deal on Wednesday with the defection of Jacqui Lambie and Palmer-aligned Ricky Muir.

Burnt once, ASIC now apparently feels less inclined to prognosticate — or perhaps the crystal ball has been smashed in a fit of rage. The language about not enforcing laws slated for repeal was absent from its Wednesday night press release, and a spokesman refused to elaborate.

All this is extra discombulating for financial planners, who are no doubt already very confused about what they need to do in the new-old regulatory environment.

PS: Medcraft is actually not on one of his OS trips. “I just walked past him,” a spokesman told Margin Call.

Lawyers in the dock

SOME of Yarraside’s finest lawyers appear to have slipped up in a case involving a vandalised soap dispenser, a missing expert witness report and five years of litigation.

QC John B Richards and law firm Clark, Toop & Taylor, which is now part of listed group Slater & Gordon, breached their overarching obligations to the court by failing to disclose the existence of a revised expert witness report, Victorian Supreme Court judge John Dixon found yesterday.

Cleaner Linda Hudspeth sued in 2009 over a fall in the boys toilet of a school, where she was trying to clean up liquid soap from a vandalised dispenser.

That’s the short version — some idea of the complexity in play can be gathered from the fact she at one stage filed a “further, further amended further amended statement of claim”.

The case eventually came to trial in November 2012, where she called expert evidence from an engineer who prepared three different versions of his report. The first two were revealed in court but the third was not.

“Like feeding sharks, cross-examining counsel immediately circled around the revelation of at least two versions,” Justice Dixon said.

Hudspeth lost the case but won an appeal and eventually settled her claim, allowing Justice Dixon to go ahead with the case examining the behaviour of the lawyers.

Singapore sling

A SINGAPOREAN fund owned by one of Sihayo Gold’s directors and a pair of Indonesian millionaires looks set to dramatically increase its stake in the exploration minnow, and other shareholders aren’t happy.

The company put out a prospectus to raise $1.5 million last month, fully underwritten by existing shareholder Provident Minerals, of Singapore.

Provident is a subsidiary of Provident Capital Partners, owned by Sihayo non executive director Gavin Caudle and two former Citigroup bankers, Indonesians Winato Kartono and Hardi Wijaya Liong.

Sadly, it looks like there were few acceptances and, based on the prospectus, unless the company can place the stock elsewhere Provident will have to take the lot, moving it from its current 14.9 per cent to about 24 per cent — without making a takeover offer.

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