Did Wily jump before AFSA pushed?

Andrew Wily hooked up and laughing.
Photo courtesy: Andrewwily.com.au

IN early February, Sydney-based insolvency practitioner Andrew Wily was required to front at a meeting with the Australian Financial Security Authority (AFSA).

The bankruptcy regulator had formed a three member committee under section 155(H) of the Bankruptcy Act to consider terminating Wily's registration as a trustee in bankruptcy.

Section 155(H) (1) allows for the involuntary termination of a bankruptcy trustee's registration. It empowers the Inspector-General to demand from the trustee a written explanation justifying why they should continue to be registered.

If the trustee's response either does not satisfy the Inspector-General, or is not forthcoming within a reasonable time frame, then under the Act, the Inspector-General must convene a committee "to consider whether the trustee should continue to be registered."

The reasons why the regulator might consider involuntary termination are numerous. If a trustee is incapacitated by illness or convicted of a crime then section 155(H) can be applied. If the regulator believes the trustee has failed to carry out their duties properly or exercise their powers in a suitable fashion then a demand under 155(H) can be issued. There is no suggestion that any of the above are the reason why AFSA was contemplating rescinding Wily's registration. On that point both Wily and AFSA are mute.

Whatever the reason, it was sufficiently serious for AFSA to form the committee comprising the Inspector-General, another public servant and a registered trustee with no conflict of interest. Under the Act the registered trustee must be chosen by the Australian Recovery Insolvency and Turnaround Association (ARITA).

SiN understands a trustee travelled from interstate to join the committee. It should not be inferred though that there isn't a trustee in NSW who doesn't have a conflict when it comes to the head of armstrongWily, who, as it turned out, arrived at the meeting accompanied by his lieutenant Paul Fury, another armstrongWily staffer and an alternate proposal.

EXCLUSIVE: Wily relinquishes bankruptcy ticket

Andrew Wily, happier without the stress
of working on profitless bankruptcies at the behest
of AFSA. Photo: Andrew Wily  

ARMSTRONG Wily principal Andrew Wily has confirmed he has surrendered his registration as a trustee in bankruptcy, blaming onerous regulation and meagre profits.

"It's been brewing for a while," Wily told SiN when asked when he decided to give up his ticket. "It's a process that will go on for months of winding down, that's all," he said.

The Australian Financial Security Authority (AFSA), which regulates personal insolvency, refused to comment when contacted. Wily's name and contact details were still present on the AFSA website's lists of registered bankruptcy trustees at time of writing, despite Wily confirming he could no longer accept appointments.

"The story with bankruptcy these days is that it's very regulated and the regulator wants everybody to do a lot of work in matters that have no money in them," Wily told SiN. "They're saying 'we don't really care if there's any money in the job or not. You have to do a whole heap of work'.

"So that means you have to employ a lot of staff, and do a whole lot of work and there's no assets in them. It's a commercial decision as to how much work you do. I think I had over 300 files at one stage," he said.

Wily denied that AFSA had pressured him to relinquish his ticket in the wake of an application late last year in the Federal Court by the liquidators of Timbercorp Finance.

In November 2014 Mark Korda and Leanne Chesser of Korda Mentha sought an inquiry into Wily's conduct and his removal as trustee of the bankrupt estate of  Melbourne-based financial advisor Peter Raymond Holt, who was banned from providing financial services for three years in September 2012 in relation to Timbercorp investments made by his clients. 

Wily said the application caught him by surprise because he had earlier approached the liquidators, seeking funding to carry out further investigations. He said he also provided lawyers for the liquidators with full access to his case files.

"No, there were no issues on that one but there's no doubt that AFSA's looking at all trustees at the moment," he said. "They're saying, 'guys you've got to keep the high levels of work up and if you don't you've got to start thinking about exiting the industry'," Wily said.

When asked if AFSA had tapped him on the shoulder in relation to an appointment other than Timbercorp Wily was equivocal, saying only that he had an enormous amount of work in progress built up over the years. That work will pass to the Official Receiver who will then allocate it to eligible private trustees.

Wily meantime will focus on corporate insolvency work, when he's not fishing and ridding properties of feral pests.

Email SiN