According to a report released by the corporate regulator yesterday on the insolvency statistics for July 2013 to June 2014, this number accounted for 2.5 per cent of the total 9,459 initial external administrators’ reports filed for all industries.
The bulk of these came from the category ‘other financial services’ which accounted for 147 lodgements, followed by managed investments which had 54 lodgements.
Superannuation, insurance and deposit taking institutions each had less than 10 lodgements.
A majority of reports lodged by initial external administrators were for companies with less than 20 employees and estimated assets of $100,000 or less.
These two categories accounted for 81 per cent and 86 per cent, respectively.
According to the ASIC report, the main reasons listed for company failure during the 12 months were inadequate cash flow or high cash use, at 42.6 per cent; poor strategic management of business, at 42 per cent; and trading losses, at 32.5 per cent.
External administrators nominated on average between two and three causes for failure.
ASIC commissioner John Price said external administrators are a critical source of intelligence for ASIC.
“In addition to providing more detailed qualitative data, the information obtained from reports helps ASIC focus its regulatory efforts,” said Mr Price.
“It also helps us assess whether enforcement action is warranted, or if a director banning action should be pursued.”
