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ASIC's Medcraft faces carpeting from senators over fraud case

ASIC's Medcraft faces carpeting from senators over fraud case
Senators have vowed to grill the corporate watchdog over its failure to stop a key figure in an alleged $110 million loan fraud from fleeing the country despite notifying the suspect he was under investigation.

The chairman of the Australian Securities and Investments Commission, Greg Medcraft, is due to front up to a Senate estimates hearing in February.

Labor Senator Sam Dastyari said he would question Mr Medcraft over ASIC's handling of the case, which saw one suspect flee and another continue to work in the finance industry for three years after coming under suspicion.

It will be the latest in a string of Senate appearances where Mr Medcraft has been called upon to explain his agency's performance, including its handling of the Commonwealth Bank financial planning scandal.

A Victoria Police affidavit relating to the case, obtained by Fairfax Media, reveals alleged suspect Mohamed Hamood fled to Bahrain two days after a search warrant of his house was executed in December 2012. It is unclear whether he has returned to Australia.

Three other suspects – Manija Zayee, Najam Shah and Aizaz Hassan – were charged last week, four years after ASIC launched an investigation following a complaint in January 2011.

On Friday Senator Dastyari called ASIC's handling of the case "deplorable" and urged it to explain why it took so long to act.

"It's time ASIC came clean about what exactly has gone on here, what's happened," he said.

"That's the least the victims deserve to know – why it took them so long to act and why a situation was allowed to happen where some of the alleged perpetrators have been able to flee overseas."

ASIC was forced to respond to criticism on Friday, with a media release defending its "commitment to tackling loan fraud in Australia".

The statement said there were some parts of the investigation that it was not able to divulge due to "legal restrictions", and said the decision to stop an individual from travelling could only be made by a judge after an application in court.

"ASIC has followed common and carefully developed principles in its investigation and legal actions in the Myra case," it said.

Spokesman for ASIC Andre Khoury failed to respond to questions from Fairfax Media on Friday.

Nationals Senator John Williams said ASIC's handling of the case appeared to be a repeat of its handling of the Commonwealth Bank financial planning scandal.

"What is the problem here. Are they under-resourced? Are they afraid to act?" he said.

"ASIC obviously knew about [the case], they investigated it, why didn't they act sooner?

"It is now 2015, getting on to four years after [the investigation started]. In the meantime people are getting their fingers burnt."

Author Georgia Wilkins
Source: The Sydney Morning Herald


1 comment

  • Wayne Ditchburn
    Wayne Ditchburn Friday, 23 January 2015 04:35 Comment Link

    ASIC, AGAIN... come on, if this was tennis it would be the longest rally in history. Senators, lets all have another talk about shall we.
    fair dink um.. what a joke.WE NEED A ROYAL COMMISSION PLEASE no more tennis


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