The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Peter Costello

Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Transcript of 28/07/2005

Doorstop Interview
Treasury Place, Melbourne

Thursday, 28 July 2005
3.30pm

SUBJECTS: Mr Stephen Vizard

TREASURER:

The Federal Court has today imposed $390,000 of fines and a 10 year ban on Mr Stephen Vizard because as a director he used information improperly to gain a personal advantage.

If there is any company director that thinks that they can use information they receive as a director for their own advantage, don’t try it.

Today’s decision shows that you can face substantial penalties including a 10 year ban from being a company director which is a very extensive ban. Over recent years the Government has increased funding very substantially to the Australian Securities and Investments Commission. The Australian Securities and Investments Commission is responsible for enforcing the Corporations Law. If there are directors that think they can use information improperly for their own advantage, they ought to know this, they risk being found and they risk severe penalties.

I hope that today’s events will send a very clear message to company directors that information you receive in the course of your directorship is not for your advantage. It is for the benefit of the shareholders that hold shares in your corporation. The company director is there on trust for shareholders, not in a boardroom for their own advantage, and if you try and use information for your own advantage the Australian Securities and Investments Commission will be empowered to track that down and bring proceedings.

JOURNALIST:

How do you view the 10 year ban as opposed to the 5 year ban that ASIC pushed for?

TREASURER:

Well, a 10 year ban is a very long period of time and I think it is appropriate in serious cases that there be a very extensive ban from continuing as a company director. If you abuse your trust as a company director, don’t expect to resume your career. A 10 year ban is an appropriate sentence for somebody who abuses their trust as a company director and I hope it sends a clear message – don’t try it. Don’t try and use information for personal advantage because you can get a 10 year ban for doing so.

JOURNALIST:

Do you see any sadness in the downfall of Vizard?

TREASURER:

The only thing I would say is this, if you are appointed as a company director, particularly if it is a public company, and you think that you can come into information and use it for yourself you are wrong. You can’t, don’t try it, and the penalties can be quite severe. If you are a company director and you come into information, that information is for the benefit of the shareholders, not you, the shareholders, the people who have invested in your corporation and the people to whom you owe a duty.

JOURNALIST:

Have you seen the DPP’s reasons for not pushing for criminal penalties and can you give it to us?

TREASURER:

Yes, the DPP has made his reasons public this afternoon. He has issued a statement which indicates why he came to the conclusion that on the evidence criminal charges couldn’t be brought. But he also makes this point, that if further evidence comes to light it is still possible that criminal charges will be laid. So this matter is not finally completed if further information or further evidence comes to light. There is no deal giving immunity from criminal charges it is just that on the evidence it wasn’t possible, on the evidence available, for the reasons the DPP has given, it wasn’t possible or advisable or reasonable, whatever the test is, to bring them in this circumstance.

JOURNALIST:

Do you support calls to strengthen the Corporate Law?

TREASURER:

Well here is an example of how the Corporate Law worked. It took somebody who was very well known and on a very major Australian company and led to a penalty provision which has banned him from being a director for another 10 years.

JOURNALIST:

Does ASIC need greater powers?

TREASURER:

Well ASIC is very well funded. ASIC has in this case managed to bring this to a conclusion quite quickly and I think there is a very big lesson here that ASIC today is not what the corporate regulators used to be 10 years ago. It is efficient and it wants to get to the bottom of matters very, very quickly and this is an example of where it did.

JOURNALIST:

So do you think criticism of ASIC is unfounded?

TREASURER:

Well here is an example where ASIC has brought penalty provisions. It has secured a penalty, a 10 year ban for a director who has improperly sought to use information for their advantage. It has done it off the back of really extraordinary proceedings which arose when a bookkeeper was committed for trial I will say to you this, when that bookkeeper was being committed for trial, very few people would have expected the outcome of that to be a 10 year ban on Steve Vizard and yet that is what has happened. So I think ASIC can say that it has acted pretty promptly in relation to this matter.

JOURNALIST:

What about the matter of a tax investigation against Mr Vizard?

TREASURER:

These are matters for the Commissioner of Taxation.

JOURNALIST:

Do you think there’s a case at all for legislative change to increase the maximum fees for conduct like this or are they sufficient?

TREASURER:

Well these things are addressed in terms of penalty units so that a penalty unit can be varied generally and all of the penalties can stay in comparative terms on a par. But you ought to bear this in mind, that the proceeding that was applied to Mr Vizard was a civil penalty proceeding. It wasn’t a criminal proceeding it was a civil penalty proceeding for a director using knowledge improperly to gain an advantage. So it was a civil proceeding and when you bear in the mind the nature of a civil proceeding these are the penalties that apply.

Okay thanks.