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  • STATE GOVERNMENT AGENCY SUED BY FEDERAL REGULATOR FOR CORPORATE LAW BREACH
  • 17/12/2009 Make a Comment
  • Contributed by: Greg ( 1 article in 2009 )
State Trustees Ltd (STL), the Victorian Government’s trustee company has been forced to settle a lawsuit for $13.5 million after being sued by the corporate regulator ASIC over its failure to properly discharge its trustee duties and for breaching its duties under the Corporations Act.

STL manages around 3,500 trust accounts and deceased estates for thousands of Victorians and is responsible to Treasurer John Lenders.

The legal action against STL was to recover compensation for 525 investors in Market Street Mezzanine Notes for which STL was the trustee.

“STL’s failure to comply with its obligations as a trustee and under the Corporations Act is of enormous concern,” said Assistant Shadow Treasurer Gordon Rich-Phillips.

“The fact that the corporate regulator ASIC had to take legal action against a state agency which is responsible for the trust accounts of thousands of Victorians should ring alarm bells in government. Instead we have had silence from John Lenders who is the responsible minister.

“Victorians are entitled to expect a state government agency which manages funds on behalf of some of Victoria’s most vulnerable people to obey the Corporations Act and carry out its trustee duties competently.

“Whenever issues of public sector corporate governance are raised, John Lenders hides behind audit sign-offs by the Auditor-General to claim that there are no problems.

“The legal action by ASIC is a clear sign that corporate governance at STL has failed, despite STL being subject to annual audit by the Auditor-General,” Mr Rich-Phillips said.

This intervention against STL by ASIC comes on top of the Victorian Liberal Nationals Coalition repeatedly raising concerns about governance at the Victorian Funds Management Corporation (VFMC).

“John Lenders has also hidden behind the Auditor-General in his defence of VFMC. This action against STL shows that that Auditor-General audits are not enough to guarantee against corporate governance failures. John Lenders has clearly dropped the ball on overseeing these agencies which invest billions of dollars,” Mr Rich-Phillips said.

Source: https://www.rich-phillips.com.au/Media/Archive/GeneralPortfolioPressReleases/tabid/113/ID/511/STATE-GOVERNMENT-AGENCY-SUED-BY-FEDERAL-REGULATOR-FOR-CORPORATE-LAW-BREACH.aspx


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