ASIC targets false declarations in the building and construction industry

ASIC’s surveillance program was set up in September 2013 to monitor the building and construction sector with particular regards to identifying illegal phoenix activities.

Feedback from the latest surveillance campaign uncovered larger companies are making false statutory declarations to claim payments for contracted work.

ASIC Commissioner Greg Tanzer said in a media statement that larger companies were sub-contracting smaller businesses to do a job, then claiming the cost but not paying the sub-contractors.

This substantially impacts the cash flow of small businesses affecting their ability to manage operating expenses and creditors.

Generally, false statutory declarations and matters of fraud are not dealt by ASIC, but under the Corporations Act ASIC can take civil or criminal action against company officers who knowingly make false statements.

Last year, ASIC banned 60 directors who engaged in misconduct including phoenix activities.

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