On 21 December 2023, a liquidator disciplinary committee (the Committee) decided that conditions should be imposed on Steven Naidenov, a registered liquidator.
In summary, the conditions require that Mr Naidenov arrange for a peer review of six external administrations, at his own cost, over the next two years for which he is an appointed external administrator. The six external administrations will be selected by ASIC.
The Committee also decided that ASIC should direct Mr Naidenov not to accept any further appointments as a liquidator from the date on which a direction is given until 30 April 2024.
ASIC’s referral to the Committee alleged Mr Naidenov was not a fit and proper person to be registered as a liquidator, as he had failed to carry out adequately and properly his duties as a liquidator and had contravened the Corporations Act 2001. ASIC alleged Mr Naidenov used money from an external administration bank account to pay the expenses of other related companies and, in some circumstances, without adequate supporting documentation.
In making its decision, the Committee noted Mr Naidenov failed to act with the degree of due care and diligence required. However, the Committee was not satisfied that Mr Naidenov was not a fit and proper person to remain as a registered liquidator.
The Committee’s decision reinforced the high standard of conduct expected of registered liquidators and that they must act with care in the protection and administration of creditors’ money. One of ASIC’s enforcement priorities for 2024 is enforcement action targeting gatekeepers facilitating misconduct. This includes registered liquidators.
The Committee also decided that ASIC should publish the fact of the decision and the Committee’s report.