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Industry turns up heat on phoenix risings

Tuesday, 22 December 2009
By Print 21 Online Article

Notorious industry practice of absconding owners starting up under a new name while leaving suppliers and employees holding the bag is drawing government fire.

A Federal Government campaign to stamp out the practice of phoenixing in order to protect creditors and workers from unscrupulous operators is receiving support from the industry association. Printing Industries CEO, Philip Andersen, said a number of printing industry companies had fallen victim to phoenix activity in the past and unless the Federal Government implemented corrective action, more companies would be victims in the future.

The practice of phoenixing in the printing industry typically happens when an owner or a group of owners run up massive debts before selling the business to an associated entity, leaving the debts to a shell that is subsequently liquidated. A number of infamous cases in the printing industry over the years have drawn lots of attention but under the current law there is little that can be done about it.

Paper companies are particularly exercised by the phenomenon, as they are usually the ones left holding the largest debt.

The Federal Government’s Proposals Paper is examining the kind of actions that can be taken against fraudulent phoenix activity. Although it focuses mainly on the labour hire industry, there is ample scope for the printing industry to make its views known.

“I encourage all industry members with views and proposals to forward them to our National Manager for Policy and Government Affairs, Hagop Tchamkertenian," said Philip Andersen.

Tchamkertenian said that whilst the Proposals Paper focuses on fraudulent phoenix activities and their impact on tax revenue and employee entitlements, the opportunity existed to cite other impacts, such as non-payments, arising from firm-to-firm supplies.

Printing Industries has spoken to the Treasury people responsible for the Proposals Paper and highlighted the importance of considering other impacts as well," he said.

”The feedback was positive. The Government is interested in hearing about other impacts. This will allow our members to present their views and recommendations for action directly to the Government via our co-ordinated industry response.

Members with examples of past or current fraudulent phoenix activity as well as those with proposals and suggestions should forward them or contact Hagop directly on 0414 953 271.
The Proposals Paper can be downloaded via the following link: action against fraudulent phoenix activity.
Comments to Printing Industries should be provided by close of business Wednesday 13 January 2010

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