ASIC Fines 12 Firms $2.2M for Financial Reporting Lapses

ASIC has issued infringement notices to 12 large proprietary companies for allegedly failing to lodge their FY24 audited financial reports on time.

The notices were issued as the result of a three-month surveillance following ASIC's increased focus on non-lodgement of financial reports by large proprietary companies.

All 12 companies, which ASIC issued infringement notices of at least $187,800 each, totalling over $2.2 million, have paid in full.

The following companies have paid an infringement notice:

• Aje Hold Co Pty Ltd
• Bing Lee Electrics Pty Ltd
• Bob Jane Corporation Pty Ltd
• Frank Green Holdings Pty Ltd
• Harris Scarfe Pty Ltd
• Global Retail Brands Pty Ltd
• Grill'd Pty Ltd
• McCain Foods (Aust) Pty Ltd
• MJ Bale Group Pty Ltd*
• Outdoor Supacentre Pty Ltd
• Pearl Corporation of Australia Pty Ltd
• White Fox Boutique Pty Ltd

*MJ Bale Group paid an infringement notice of $198,000, as its alleged contravention occurred after the penalty unit value increased.

Payment of an infringement notice does not constitute an admission of guilt or liability.

The specific reasons for ASIC's concerns are set out in the infringement notice on the Infringement Notices Register.

For all companies that have paid the infringement notice but have outstanding financial reports, ASIC's investigation remains open.

ASIC's focus on non-lodgement of financial reports

As part of its surveillance, ASIC examined a range of data sources to identify companies with significant revenue, assets or large numbers of employees that had not lodged financial reports. ASIC engaged with 217 companies and alleges that 70% (151) were non-compliant for failing to lodge a financial report for one or more financial years FY23 and/or FY24. Following ASIC's queries, 103 companies lodged financial reports (see Table 1) and a further 41 are in the process of doing so.

ASIC prioritised engagement with larger, more material companies and queried whether they met financial reporting thresholds for FY23 and/or FY24. ASIC also contacted companies that had received an auditor breach report for non-lodgement of financial reports.

ASIC Commissioner Kate O'Rourke said: 'Large proprietary companies are legally obliged to provide financial reports to ensure that those dealing with these businesses can make informed decisions.

'ASIC is concerned by the substantial number of companies that appear to have not met their obligations either by lodging late or failing to lodge at all.

'ASIC calls on the directors of large proprietary companies and other entities with financial reporting obligations to proactively review their reporting obligations and ensure financial reports are lodged in a timely manner.

'We also remind auditors of these entities to notify ASIC if they are aware or suspect that a company is not complying with its lodgement obligations,' said Ms O'Rourke.

ASIC intends to take further action against some of the companies that were the subject of the recent surveillance, including some of companies that are still in the process of lodging their financial reports.

ASIC's ongoing work on financial reporting

ASIC remains focussed on driving improved compliance by companies and other entities with financial reporting obligations. Financial reports play an important role assisting creditors and other users of the reports in making informed decisions when dealing with large companies.

'Targeting financial reporting misconduct including failure to lodge financial reports is an ASIC enforcement priority for 2026. ASIC will continue to monitor and address lodgement failures, including taking regulatory action for ongoing non-compliance,' said Ms O'Rourke.

'ASIC intends to undertake further surveillance work relating to the compliance by large proprietary companies and other entities with financial reporting obligations in 2026.

'We are stepping up enforcement action against financial reporting misconduct and will continue to leverage a range of data sources to identify potential non-compliance, including notifications by auditors,' she said.

Background

Financial reporting obligations

Large proprietary companies must prepare and lodge a financial report and a director's report within four months after the end of the financial year unless ASIC has granted relief.

A proprietary company is classified as 'large' if it meets at least two of the following criteria for a financial year:

• the consolidated revenue of the company and any entities it controls is $50 million or more
• the consolidated gross assets of the company and any entities it controls is $25 million or more
• the company and any entities it controls have 100 or more employees.

Whether a company meets these criteria can depend on how the business is structured.