ASIC claims that the regulator operated at ‘glacial’ speeds in response to over k pays of almost 200k

ASIC claims that the regulator operated at 'glacial' speeds in response to over k pays of almost 200k

Karen Chester, executive chairman of the Securities and Exchange Commission of Australia (ASIC), said it took too long for the corporate watchdog to respond to the knowledge that its employer and subsidiary had paid nearly $ 200,000 more.

Ms Chester admitted that the Auditor General was very concerned about ASIC’s poor response to the extra payments she had to write to Federal Treasurer Josh Friedenberg about her concerns.

ASIC has been embroiled in controversy since its release last week, which has paid more than $ 118,000 in personal tax advice to its employer James Shipton and nearly $ 70,000 in housing costs to its vice president, Daniel Grennan.

Officials at the Australian National Audit Office (ANAO) are concerned that the salaries of both men may have exceeded the limits set by the tribunal.

When the news broke, Mr Shipton said an independent inquiry was pending.

Later on Monday, Mr Grennan resigned from the organization, saying he planned to retire in July 2021, but said his immediate resignation would be “in the best interests of ASIC”.

James Shipton was announced as the next ASIC Chairman on October 17, 2017 by the then Minister of Financial Services Kelly O’Dwyer.(ABC News: Matthew Roberts)

ASIC brings the matter to the attention of the Auditor General

On Tuesday, when Ms. Chester asked for a Senate assessment, ASIC officials found $ 187,000 in overpayments during an internal audit and brought the matter to the attention of the ANAO last year.

ANAO’s 2018-19 Closing Report, released in August 2019, recommended ASIC to consult with the Pay Tribunal on the classification of questionable payments.

This has not yet happened at the end of September 2020.

On October 6, 2020, ANAO released its draft findings to ASIC stating that ASIC would repay Mr. Grennan’s $ 70,000 Commonwealth loan to ANAO.

Ms. Chester said she understood why ANAO was frustrated by the time it took ASIC to resolve the issue, and acknowledged that direct warning to the federal treasurer was an exception for ANAO.

Liberal Senator James Patterson said he was concerned about why the ANAO felt the need to write to the Treasurer about the issue.

“It is not normal for the Auditor General to write a letter to a minister. I bring this matter to your attention in order to gain more confidence that appropriate action has been taken,” he said.

“I do not know of any precedent for that … this is an exception for the Auditor-General.”

Ms. Chester agreed.

“I don’t know a role model [of an auditor-general sending] Section 26 letter to a minister is from my own experience of about 18 years of public service life, but I discussed it with the acting treasury secretary, ”he said.

“So we take this incredibly seriously.”

ASIC says the issue is complex

M.S. Chester said the issue was complicated because Mr Shipton and Mr Grennan were paid at the time the money was discovered, so ANAO was not in a position to make a “risk retreat decision”.

“So, this means it needs the involvement of the treasurer,” he said.

“So there were ongoing discussions with the Treasury, a conference with the Treasury, and then the Treasury wanted the ASIC pay tribunal to go, so we thought we’d get legal advice. We got legal advice, and that ended the fiscal year.”

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Cory Weinberg

About the Author: Cory Weinberg

Cory Weinberg covers the intersection of tech and cities. That means digging into how startups and big tech companies are trying to reshape real estate, transportation, urban planning, and travel. Previously, he reported on Bay Area housing and commercial real estate for the San Francisco Business Times. He received a "best young journalist" award from the National Association of Real Estate Editors.

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