Cbus backs director identification measures to address phoenixing
Cbus, Australia’s leading building and construction industry superfund, has backed the introduction of Director Identification Numbers (DINs), in a submission to Treasury consultations to draft legislation.
Cbus Group Executive Robbie Campo said the measures would help protect members’ entitlements from illegal phoenixing.
“Cbus strongly supports efforts to combat illegal phoenixing activity and to hold both those people who conduct and those who facilitate the activity accountable,” Ms Campo said in the submission.
“The impact of illegal phoenixing activities on Cbus members has been significant. It is recognised that the construction and building industry in Australia has a significant problem with phoenix activity.
“The Australian Securities and Investment Commission (ASIC) has stated that ‘The construction industry is the highest represented sector in illegal phoenixing activity.’”
The introduction of DINs would help level the playing field for the majority of companies who do the right thing by removing some of the unfair competitive advantages gained by people who wilfully avoid their legal and regulatory obligations.
The Cbus submission argues that DINs structures could substantially improve the capacity to detect those directors who had previously been involved in illegal potential phoenix activity early on and create a framework for identifying how Cbus deals with these companies.
The new regime could assist Cbus and service providers in the early identification of directors who have a track record of illegal phoenix activity and assist in effective communication of such activity to the regulators.
“Over the past 10 years Cbus, working with Industry Funds Credit Control (IFCC), has recovered more than $31m in members’ superannuation entitlements from insolvency actions,” Ms Campo said.
“In the past five years Cbus has recovered around $330m in unpaid superannuation owed to members and more than $600m over the past 15 years.”
Industry Super Australia, the peak body for Industry Funds, has previously called for the DINs regime to be implemented as a matter of priority.
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