Parliamentary committee hits out at ASIC over immunity claims

A parliamentary committee run by Liberal Senator Andrew Bragg has accused ASIC of ‘trying to frustrate’ an inquiry into the regulator’s effectiveness.

A parliamentary committee run by Liberal Senator Andrew Bragg has accused ASIC of “trying to frustrate” an inquiry. Picture: Gary Ramage

A parliamentary committee has launched a salvo at the corporate regulator, claiming it has frustrated attempts to examine its conduct through aggressive claims of public interest immunity.

The investigation by the Senate economics committee – led by Liberal Senator Andrew Bragg – into the Australian Securities and Investments Commission investigation and enforcement actions has taken the regulator to task in an interim report handed down on Tuesday.

The interim report claims ASIC has only provided answers to 104 of 109 questions asked of it by the inquiry and has attempted to not provide answers on several matters by claiming public interest immunity.

The report claims ASIC has refused to answer some questions and that its chair, Joe Longo, had made 13 public interest immunity claims.

However, the committee has moved to reject 11 of the 13 claims “after careful consideration”.

“The committee is concerned by ASIC’s behaviour in relation to the commencement of this inquiry,” the report said.

“Rather than engaging with the committee in a transparent and accountable manner, from the outset ASIC has chosen to attempt to undermine and influence the process of the inquiry before evidence had been gathered or hearings held.”

The committee notes ASIC has declined to respond to questions on ASX-listed tech company Nuix and fellow listed battery and graphite player Magnis Energy Technologies, as well as detail its interactions with parliamentarians.

Nuix has faced repeated run-ins with ASIC, which investigated the firm’s troubled market debut as well as allegations insiders in the firm failed to disclose market information.

ASIC chairman Joe Longo. Picture: David Geraghty

ASIC recently hit Nuix with court action, alleging the board allowed false information to be published to the market.

Magnis also faced attention from ASIC, which investigated claims the company’s chair, Frank Poullas, allegedly engaged in pump-and-dump activities. However, ASIC dropped its investigation into Mr Poullas, who denies all allegations.

The report proposes ASIC answer these questions either in a redacted form or in a closed in-camera meeting with the committee members.

The inquiry into ASIC, which was established in October last year, came in the wake of a report by John Adams into the effectiveness of the regulator.

Labor Senator Deb O’Neill also attempted to set up a competing inquiry through the Parliamentary Joint Committee on Corporations and Financial Services, which she chairs.

Senator Bragg’s committee has sought to have ASIC explain if it lobbied the government or other members of parliament in the days leading up to the establishment of the competing inquiries.

“The committee finds it troubling that instead of reflecting on and responding to this broad community concern, ASIC has instead chosen to hinder the committee’s work by refusing to answer questions on notice,” the report notes.

Senator Bragg said ASIC was “trying to frustrate the Senate’s role to investigate porous law enforcement in Australia”.

“ASIC has one main job which is to enforce the law and achieve prosecutions. ASIC has failed to do its job,” he said.

“This report is certainly not a list of recommendations to fundamentally fix ASIC.”

Senator Bragg said the committee would seek to make a referral to the parliamentary privileges committee about ASIC’s alleged attempts to lobby parliamentarians.

Speaking in parliament, Senator Bragg said ASIC’s use of immunity claims has “led to a massive disruption”.

“A common theme here is insider trading,” Mr Bragg said.

“I would say that if you engage in insider trading, you will get away with it because ASIC will not prosecute you, you will not go to jail, you will not face a sanction.”

ASIC is scheduled to face a parliamentary hearing on Friday. The hearing, originally set to be a spill-over day from parliamentary estimates, has been changed and will instead mark the first day of hearings by Senator Bragg’s inquiry.

The meeting comes as ASIC prepares to iron out the last of a major organisational restructure put forward under the regulator’s new leadership.

The regulator is preparing for the government to announce several new replacement commissioners after the departure of Cathy Armour and Sean Hughes, and the looming exit of Karen Chester and Danielle Press from ASIC when their terms expire.

ASIC has declined to comment.