Please try to give reasonable prominence beyond the face value of this story…. beneath all this there is govt corruption which will take time to weed out. what is here is as close as I can go at present.
A principal of a Canberra auctioneering company which went into liquidation owing at least $1.1 million, is seeking an ACT auctioneer’s licence.
Colin Lappa, of Dubbo, is one of two shareholders of Sale-O Pty, which traded as Australian Capital Auctioneers. He has a NSW auctioneer’s licence. His application for an ACT licence is being objected to.
The objection is not being made by either the ACT or Federal Governments to whom Sale-O owes up to $1 million, but by a former employee.
The objection will be heard on August 24 by a magistrate, in accordance with the Auctioneers Act.
A liquidator, Ray Dawson, of Ernst Young, was appointed by the Federal Court last month.
Australian Capital Auctioneers, which was the authorised Federal Government auctioneer, had a large trade in selling government goods, especially cars, furniture and computer equipment.
Mr Dawson said a “”best estimate” presented to the court showed the company had assets of $40,000 and debts of $1.1 million after 2{ (two and a half) years trading. As $80,000 was owing in group tax which takes preference, no other creditor would get paid.
However, ACT and Commonwealth sources suggest the precise debt might never be known because of defective record keeping of assets and payments for them after sale. Apparently some amounts had been outstanding for some time without demands being made for payment.
Sources in the auction industry say the case presents a major difficulty. Those people in various ACT and Federal departments responsible for asset disposal will not want their deficiencies exposed so will not be eager to find out precisely where, when and how goods were disposed of or if, how and when they were accounted for, or indeed what goods were sent for auction in the first place.
It will make it difficult for the liquidator to work out precisely how an auctioneering company (which usually have fairly low overheads because they do not have to buy stock, but merely hold it and sell it on commission) could run up $1.1 million in debts over only 2{ years.
A considerable number of private citizens who gave the company goods for auctioning will now lose their money. Some will be asking the liquidator to find out when their goods were sold and what happened to the proceeds.
The ACT law on auctioneers does not provide for proceeds of sales after deductions for fees and expenses to go into a trust account, like most other states and like the requirements for lawyers. And there is no provision for spot audits, as for lawyers.
DAS sources say that since 1989 departments and agencies have been responsible for their own asset disposal.
Towards the end of last year when some agencies signalled they were having difficulty obtaining money owed from ACA, DAS stepped in. They say some agencies had not chased up their money until it was too late. DAS did not have an inventory of all Federal Government items sent to ACA for disposal. It was working with agencies to find out was what unaccounted for.
The Federal Government no longer has an authorised auctioneer, but is in the tender process now: one for cars for which a contract should be signed in the next few weeks, and one for goods soon afterwards. DAS sources say they are being extra careful with this tendering and contract process.
In the meantime, agencies are making their own arrangements for the disposal of assets.
The ACT Opposition says it will ask questions when the Assembly sits seeking assurances that no-one associated with ACA has had or will get contracts for sale of ACT assets.
It has called for the full implementation of recommendations of three inquiries into the setting up of a full ACT assets register: the Priorities Review Board and the Else-Mitchell inquiry into the Assets and Public Debt of the ACT in 1990 and the Audit-General’s report last year.
The ACT Department of Urban Services says disposals are the responsibility of individual agencies. Overall ACT Government expose had been small, the department said.