Annual reports 2022-2023: of ASIC – ‘a deliberate strategy of obfuscation so that the public is kept in the dark ….’? and of AFSA

ASIC’s ASIC Annual Report 2022–23 has been released amidst some recent severe criticism of the quality of its annual reports over the years, in relation to enforcement of director obligations, to the point of suggesting that the reports appear to adopt “a deliberate strategy of obfuscation so that the public is kept in the dark about how little it is that ASIC actually does each year across its various teams”.[1]

It also differs significantly from the annual report of its co-insolvency regulator, AFSA, prepared according to s 12 of the Bankruptcy Act.  


Under s 136 of the ASIC Act 2001, ASIC’s annual report must contain a range of information.  In the context of its corporate insolvency reporting, it must include details about the activities that it has undertaken during the relevant period in exercise of its powers, and performance of its functions, under Chapter 5 of, or Schedule 2 to, the Corporations Act and any related provisions. 

Section 136 is not referred to in ASIC’s 2022-23 report and it is a matter of finding the relevant information by some key words.

  • The ASIC annual report says that ASIC regulated 656 registered liquidators who accepted appointments to nearly 8,000 external administrations under Ch 5 of the Corporations Act.
  • ASIC convened 36 committees under Div 20 0f Schedule 2 to consider applications for registration as a liquidator and from those processes 29 new liquidators were registered.
  • Also, four disciplinary committees were convened to consider claims of misconduct. Two committees determined that the registration of the respective registered liquidators should be cancelled. The decisions of the other two committees convened were pending at the end of the financial year.
  • ASIC processed around 6,100 Declarations of Independence, Relevant Relationships and Indemnities (DIRRIs) using natural language processing (NLP) and machine learning (ML), identifying an average of 17.7% of DIRRIs for review. It began inquiries into 9.8% of DIRRIs reviewed, including DIRRIs from group appointments.
  • The annual report provides statistics on the new simplified debt restructuring process for eligible small corporate businesses under Part 5.3B of the Corporations Act and the new type of registered liquidator entitled to be appointed to them.  
  • There were 181 convictions related to individuals who failed to assist registered liquidators and 48 convictions related to companies that failed to lodge annual financial reports with ASIC.   Eleven related to criminal convictions prosecuted by the Commonwealth DPP, with 3 receiving custodial sentences.
  • Twenty seven persons were disqualified from managing corporations, with 3 related to illegal phoenix activity.
  • ASIC received 5,775 initial reports from external administrators. Of these, 5,084 reported suspected offences by company officers, and the remainder were lodged because the return to unsecured creditors may be less than 50 cents in the dollar.  Of those 5,084 that reported misconduct, ASIC requested supplementary reports from the external administrators in 778 cases. ASIC referred 34% of those supplementary reports for compliance, investigation or surveillance action, compared to 20% in 2021–22.
  • There were three s 30B ASIC Act notices issued to registered liquidators requiring information or books.
  • As to the AA Fund, on 1 July 2022, ASIC was allocated $4.668 million, which, together with an amount of $10.197 million rolled over from the previous financial year, resulted in total available funds of $14.865 million. ASIC paid and committed $8.695 million to liquidators in 2022–23. Applications in progress and grants approved comprised approximately 70% of the remaining balance of the allocated funds. The number of liquidations increased by 44.96% and the number of AA Fund applications increased by 16%, compared to 2021–22.  The report goes on to give details of the types of funding approvals.  The AA Fund assisted in the banning of 24 directors, representing 75% of the total 32 directors banned, with the average banning period for funded matters being 42 months. There was one criminal conviction/prosecution.
  • ASIC also funded the appointment by ASIC of one reviewing liquidator under s 90-23 of Schedule 2 and six liquidators to abandoned companies under s 489EA.

Director ID

ASIC reports that the director identification number – director ID – was introduced in November 2021, as part of the Modernising Business Registers program. Most directors have now obtained a director ID, with more than 2.3 million director IDs issued. ASIC says it is responsible for enforcing related offences set out in the Corporations Act, which include failing to obtain a director ID.

ASIC notes the independent review report of the MBR program of February 2023.  Although post 30 June 2023, ASIC reports that the government made a decision in August 2023, in response to the review’s findings that the expected economic benefits of the program did not justify the revised costs, that the MBR program would be stopped and that priority would be given to the stabilisation of existing registers. ASIC says it is working with Treasury and the ATO to implement the government’s decision and to plan the way forward for the modernisation of business registers. “The Government will consider options to uplift registries following further analysis”.

There is no information about when public access to the register will be given.    


Professor Jason Harris’s submission to the PJC inquiry into ASIC’s investigation and enforcement says that a

“review of ASIC’s annual reports over 24 years (1998-2022) reveals a raft of inconsistencies and gaps in reporting on enforcement activities, including changing the way enforcement activities are reported from year to year, such that the transparency and accountability of ASIC has been a problem for more than 20 years”.

He reports for example that over the last 24 years, ASIC has brought approximately 211 court enforcement actions each year, and approximately 104 directors are banned or disqualified each year.  Most relevantly, these numbers have

“not changed substantially in that 24 year period despite large increases in funding and large increases in staff resources”.

He also lists the problems of inconsistencies in the way enforcement activities are reported from year to year, such as using whole numbers in some years and percentages in others; grouping investigations with court enforcement in some years but not others; including civil criminal and administrative enforcement outcomes in some years but then separating those matters out into separate categories in other years; and reporting actions commenced in some years but actions concluded in others. 


There is no real danger in inconsistency in reporting in AFSA’s annual report because there is very little data in it. AFSA now reports its statistics separately, but some have been extracted in its report. 

There was a total of 9,930 personal insolvencies in 2022-23. Of these 5,844 were bankruptcies, 3,942 were debt agreements, 12 were personal insolvency agreements and 23 were deceased estates. The Official Trustee handled 4,352 of these from which 459 dividends to creditors were paid. 

There were 210 trustees and 58 registered debt agreement administrators.  There were 53 trustee inspections and 13 completed Inspector-Geneal reviews. 

Referrals to the DPP led to 91 prosecutions.  Three pre-insolvency advisers were ‘disrupted’. 

Court action is being taken by the Inspector-General in Bankruptcy and the Official Trustee for the repayment of trust money in the order of $1m by a former registered debt agreement administrator; the matter is next in court on 8 November 2023. 

The bulk of AFSA’s 2022-23 statistics are yet to be published on its website.

AFSA also administers the PPSR and proceeds of crime law, on each of which its report contains useful information.   


While ASIC’s data should be consistent in its reporting, or explained when it changes, perhaps annual reports are not the place to find more detailed data on a particular sector.  In preparing its annual report, along with other Commonwealth agencies, ASIC is required to comply with the Public Governance, Performance and Accountability Act 2013 (the PGPA Act) and Rules which give only general guidance about content etc.  See Annual Reports | Department of Finance.    Section 136 ASIC Act is, however, insolvency specific, and is in addition to the PGPA Act requirements.  Despite s 136, it might be preferable for agency statistical data to be published elsewhere than in the formality of an annual report slotted among details of executive remuneration, diversity policies and KPIs. 

That is the case with the annual report of AFSA, which, in the past, contained a wealth of useful statistics.  While ASIC is required by s 136 to report on Schedule 2 issues, there is no comparable requirement for AFSA to report on the parallel Schedule 2 to the Bankruptcy Act – see s 12(1)(d) of the Act. 

Data that would allow an operational and financial comparison between the two regulators would be useful, given they usually regulate the same practitioners in relation to the same or similar harmonised process rules.  Nor is a cost comparison between regulators possible, with ASIC levying liquidators themselves and AFSA levying on the value of assets realised by trustees.  

Neither of the government’s Statement of Expectations (AFSA, 2023; ASIC, 2021) nor the regulators’ responses allow much to be said about law reform and improvement.  AFSA’s report does refer to the July 2023 PJC Report on corporate insolvency and that it will work with government agencies on that. ASIC’s annual report simply notes the PJC inquiry though its statement of intent usefully refers to continued cooperation with other regulators and promoting common approaches to regulation.

The real issue is not where the data is published but its quality, sufficient to allow informed decisions on law reform. It should necessarily avoid the sort of inconsistencies Professor Harris has listed.  Professional statistical input should be a given.  The lack of quality data has again been raised, and more recommendations made, in the PJC Report on Corporate Insolvency. 

It remains to say that the 2010 Senate report on ‘the regulation, registration and remuneration of insolvency practitioners in Australia: the case for a new framework’, 2010, recommended that in what was proposed as the new Insolvency Practitioners Authority, there be

“a unit established that is responsible for gathering, collating and analysing data on a range of corporate and personal insolvency matters”.

The data was to be made publicly available in the Authority’s annual report and available online for no charge.

For the moment, see A productive insolvency regime – who knows? – Murrays Legal


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