ASIC staff may aid graft probe
Australian Securities and Investments Commission chairman Greg Medcraft said his agency was working closely with the Australian Federal Police by sharing intelligence and, potentially, staff.
"The relationship and the liaison with AFP are absolutely critical; we are meeting with them regularly and we are actually looking into secondment of somebody into the AFP to make that relationship even stronger," he said.
But, after a speech to the American Chamber of Commerce in Australia on Friday, Mr Medcraft said that any ASIC-led civil investigation into the bribery allegations against Leighton should follow the criminal investigation by the Australian Federal Police.
He said it was "absolutely incorrect" to suggest ASIC and the police could run parallel civil and criminal investigations.
"The main game is criminal. We want to have an efficient use of resource and get the best possible outcome. Let the AFP do its job of pursuing the criminal charges," he said.
Mr Medcraft said he was reluctant to use the formal investigative power of the ASIC, which could compel witnesses to give evidence. He said it was extremely damaging for a company if ASIC launched a formal investigation.
The ASIC chairman also suggested reputational damage flowing on from foreign corruption charges could act as a strong deterrent against wrongdoing by company directors.
"If a company or its employees are seen as in some way of being tainted by bribery allegations, that will affect your reputation.
"And for most of the companies, the most valuable asset is their reputation."
The corporate watchdog can pursue company directors for breach of duty under the Corporations Act for alleged bribery of foreign officials.
Meanwhile, Mr Medcraft threw his weight behind litigation funding, describing it as a "democratisation of law" and not in need of further regulation.
"As long as they treat ... the people who are investors fairly, and they don't take too much of the recovery, I think class litigation acts are great democratisation of law," he said. "I am not a fan of more regulation. You avoid regulation if there is not a problem with litigation funders."
The comments come amid expectations that the government will review the sector.
Frequently Asked Questions about this Article…
The article reports high-profile bribery allegations against construction company Leighton. These allegations have prompted a criminal investigation by the Australian Federal Police (AFP) and close attention from the corporate regulator, ASIC.
Yes. ASIC chairman Greg Medcraft said his agency is sharing intelligence with the AFP and is looking into seconding staff into the AFP to strengthen liaison and support the criminal investigation into the Leighton bribery allegations.
Medcraft said any ASIC-led civil investigation should follow the AFP's criminal work. He emphasised that it would be incorrect for ASIC and the police to run parallel civil and criminal investigations and wants the AFP to lead the criminal case first.
Medcraft said he is reluctant to use ASIC's formal investigative powers that can compel witnesses because launching a formal ASIC investigation can be extremely damaging to a company's reputation, which can have material consequences for investors.
The ASIC chairman noted that foreign corruption charges and bribery allegations can taint a company or its employees and harm reputation. For many companies, reputation is a key asset, and reputational damage can negatively affect investor confidence and value.
Yes. The article states that ASIC can pursue company directors for breach of duty under the Corporations Act in cases of alleged bribery of foreign officials, which is relevant to investor protection and director accountability.
Medcraft backed litigation funding as a 'democratisation of law' and said he is not in favour of more regulation, provided litigation funders treat investors fairly and don't take excessive portions of recoveries. He sees class litigation as potentially beneficial for investors.
The article notes that Medcraft's comments come amid expectations the government will review the litigation funding sector, although he personally indicated he would avoid extra regulation unless there is a clear problem.
Call 1300 880 160
Start a chat
Schedule a call
