Quick tip to any budding corporate crook — you’re far better off committing a crime in Australia than across the Tasman. For while ASIC, Australia’s corporate watch puppy has been hesitant to lay any criminal charges from the many corporate follies around the time of the global financial crisis, New Zealand regulators have proved to be less of a soft touch.

Last week, a New Zealand court found two directors of failed property company Bridgecorp guilty of making untrue statements in investment prospectuses. The judge remanded the disgraced directors, Rod Petricevic and Rob Roest in prison pending their “inevitable” imprisonment. The charges related to comments made to investors in late 2006 at time when the company has missed payments of interest and principal to lenders. Bridgecorp collapsed a few months later owing creditors more than $400 million.

The contrast between the strong actions of New Zealand’s corporate regulators and the limp response of ASIC to alleged corporate malfeasance is striking. While ASIC has laid criminal charges against former ABC Learning Centres boss Eddie Groves, the charge is a relatively minor one (which involved the sale of $3 million worth of child care centres for former executive director Martin Kemp). It has taken almost four years from ABC’s collapse for Groves to appear before the court (which is finally expected next month) on the charge of dishonestly using his position as a director.

So far, no criminal charges have been laid against the executives of Babcock & Brown, Allco Finance Group, MFS, Timbercorp or Great Southern Plantations. That ASIC has not lain charges against David Coe or Gordon Fell (who were former directors of Allco) is especially mystifying, given the circumstances of Allco’s collapse, and the multimillion purchase of the faltering Rubicon property group. The purchase of Rubicon allowed Fell to receive more than $26 million and Coe $12 million. At the time of the purchase, Rubicon’s auditor, PwC, had raised substantial doubts about the solvency of the Rubicon group, a fact that was never disclosed to Allco shareholders. Allco also misclassified about $2 billion in liabilities on its balance sheet (in a similar manner to the also collapsed Centro), with no apparent ramification.

ASIC doesn’t limit its lack of action to only large companies. Former high flier and bankrupt Craig Gore, whose recent collapse cost creditors almost $500 million, has faced no criminal charges. That is despite the court-appointed liquidator of Gore’s company Secured Capital & Finance, alleging that Gore had run “something akin to a Ponzi scheme”. Similarly, no action appears to have been taken by ASIC in relation to the empire of disgraced former Energy Watch boss Ben Polis, whose former company collapsed in 2008 owing more than $110,000 to staff and other creditors. Polis, who is understood to have recently fled Australia after his controversial racist comments were made public, is understood to have borrowed thousands of dollars from the collapsed company for dentistry, ski trips and hairdressing.

The Bridgecorp action isn’t the first time New Zealand corporate crooks have fared worse than their Australian counterparts. Former high-flying New Zealand entrepreneur Allan Hawkins, who was once New Zealand’s second richest person (with a fortune of $US361 million) was jailed in 1992 for three years his role in a foreign exchange scandal. The charges related to the infamous cross-shareholding between Elders IXL and BHP (to fend off a hostile takeover from Robert Holmes a Court) and involved a secret payment made by Elders to Beid, a company owned by Hawkins.

While Hawkins was jailed for his role in the fraud, the directors of the company that made the payment, including high fliers John Elliot and Peter Scanlon, were exonerated on a legal technicality and no further action was ever taken against them. Australian authorities also declined to take any action against the late Richard Pratt, who was also involved in the takeover defence in a similar role to Hawkins and received a dubious payment from Elders through a failed Bermudan company.

It is perhaps not entirely surprising that Australia’s corporate watchdog tends to take a somewhat lenient stance. The most recent former head of ASIC, Tony D’Aloisio, was a corporate lawyer from blue-blooded law firm Mallesons, and was the CEO of the ASX. D’Aloisio himself was embroiled in controversy when shortly after assuming the role of Australia’s chief corporate cop, D’Aloisio and his wife (former Westpac senior executive Ilana Atlas) purchased winery interests from the collapsed Evans & Tate group. ASIC had previously granted the liquidators of Evans & Tate an exemption from disclosing financial accounts in record time (in a decision that was labelled as “extraordinary” by governance experts).

It appears that it’s difficult to be too harsh on the poachers when the gamekeepers aren’t exactly without fault.

*Adam Schwab is the author of Pigs at the Trough: Lessons from Australia’s Decade of Corporate Greed.

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