ASIC reports on corporate insolvencies for the last three financial years

ASIC reports on corporate insolvencies for the last three financial years


ASIC recently published its annual overview of corporate insolvencies.

The tables below compare these statistics over the 2010-11, 2011-12 and 2012-13 financial years, according to industry type, employee numbers, causes of company failure, the number and value of the unsecured creditor debts and the estimated dividends to unsecured creditors.

Profile of companies subject to external administration

2012-13

2011-12

2010-11

% of reports:-
  • involving less than 20 employees

81%

78%

78%

  • by industry

–          Construction

–          Other (business & personal services)

–          Retail trade

24%

24%

10%

22%

24%

10%

23%

23%

11%

  • with estimated assets of $100,000 or less

85%

85%

84%

  • with estimated liabilities of $250,000 or less

43%

42%

44%

  • with an estimated deficiency of $500,000 or less

65%

64%

65%

 

 

Causes of company failure

2012-13

2011-12

2010-11

% of reports:-
  • by cause of failure

–          Poor strategic management of business

–          Inadequate cashflow or high cash use

–          Trading losses

42%

41%

32%

44%

40%

33%

44%

41%

33%

  • with estimated dividends to unsecured creditors or less than 11 cents in the dollar

97%

98%

97%

 

 

Possible misconduct

2012-13

2011-12

2010-11

Top 3 alleged possible misconduct:-
  1. Insolvent trading

Y

Y

Y

  1. Obligation to keep financial records

Y

Y

Y

  1. Care & diligence – Directors’ & Officers’ duties

Y

Y

Y

 

 

Further enquiry warranted by ASIC

2012-13

2011-12

2010-11

 
  • % or reports where external administrators had evidence in their possession and believed that further enquiry warranted

13.5%

(1,253 rpts)

12%

(1,215 rpts)

11%

(851 rpts)

  • Number of external administrator supplementary reports requested by ASIC to determine whether to commence an investigation

677

738

558

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