Warning on illegal schemes
THE Australian Securities and Investments Commission and the Australia Tax Office have jointly warned the public against using illegal schemes promising access to their superannuation before retirement.
ASIC executive director of consumer protection Peter Kell said: "These schemes specifically target people on low incomes and those in financial difficulty such as those having trouble paying their phone bills, credit cards or mortgages".
"The promoters also single out retrenched workers and those living in rural and remote communities, particularly farmers and indigenous people.
"They may falsely claim you can withdraw your super or use a self-managed fund to pay off debt, make a deposit on a home, or buy a car or holiday.
"In the worst cases, promoters of these schemes have stolen their clients’ superannuation money.
"ASIC has successfully obtained jail terms for the most serious offenders."
Deputy Commissioner of Taxation Mark Jackson said under the scam promoters urged people to set up a self-managed superannuation fund into which they roll their preserved superannuation.
He said the client was told that as trustee of the SMSF they could decide how its assets were spent.
"The promoter then charges a commission, usually 20 per cent or more of the fund’s assets, for their services," Mr Jackson said.
"If people need early access to their superannuation on compassionate or extreme financial hardship grounds, they do not need to pay a promoter."
Court decision a first for ASIC program
THE appointment of liquidators to wind up a New South Wales building company by the Supreme Court of NSW represents a first for the Australian Securities and Investments Commission’s National Insolvent Trading Program.
The program was established by ASIC in July 2003 to review companies suspected of trading while insolvent and follows a successful pilot project in Sydney and Melbourne.
In the six months since the program was established:
p Surveillance visits of 285 companies (including a number of related companies) were conducted;
p 26 companies appointed a voluntary administrator or liquidator following a visit;
p Updated or additional financial information was sought from 105 of the companies visited; and
p Restructuring advice was sought by directors of a significant number of companies visited.
A key aim of the program is to have directors focus on the solvency of their companies and take action sooner, rather than later, where solvency problems exist.
ASIC executive director public and commercial services Mark Drysdale said the primary focus of the program was to encourage directors to act earlier to prevent insolvent trading.
"This proactive approach to ensure we deal with insolvent trading sooner rather than later is in addition to our criminal and civil action under the insolvent trading provisions of the Corporations Act," he said.
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