Call for ASIC, legal action over Ion

Date: 06 May 2005

The Australian Workers' Union (AWU) is calling for legal action and ASIC prosecutions over the collapse of automotive parts maker Ion Ltd.

AWU National Secretary Bill Shorten told the Second Meeting of Creditors of the Ion group in Adelaide today that the Australian Securities and Investment Commission (ASIC) should act over the failure and proposed other legal action by workers, shareholders and creditors.

Hundreds of Ion workers have lost their jobs since Ion went into Voluntary Administration last December. The report by Administrators McGrath Nicol to today's meeting revealed major failures of financial control at the company, bad decision-making and net selling of shares by company-related parties in the months before the collapse.

The AWU and employee creditors at today's meeting supported a proposed Deed of Company Arrangement (DOCA) to save as many of the Ion jobs as possible and to ensure all Ion workers are paid their accrued entitlements in full.

In a speech to today's creditors' meeting, Mr Shorten raised the following questions:

- How could the directors have been unaware of Ion's problems and continued to make optimistic forecasts about the company's future?

- Why were company-related parties selling Ion shares prior to the administration?

- Why was Grant Samuel appointed as advisors on 14 April 2004 when the CFO recommended a cheaper bid by KPMG and an Ion director was also a director of Grant Samuel Corporate Finance?

- How could the banks approve $400 million in unsecured loans to Ion barely three months before the collapse?

- Is the Administrator pursuing the directors for breach of statutory duties or taking any action against the auditors, banks or advisors?

"It is time for ASIC chairman Jeff Lucy and his team of untouchables in the insolvency unit to get cracking on this corporate disaster," Mr Shorten said.

Mr Shorten also called for changes to the Corporations Act and Australian Accounting Standards to give employees maximum priority of payment in company failures and to provide better information to workers for early warning of corporate collapse.

AWU SA Branch Secretary Wayne Hanson told a rally of hundreds of Ion workers and their families before today's Creditors Meeting that the SA State Government should help save Ion jobs by funding "the moderate, one-off environmental clean-up costs" to facilitate a sale of Ion's North Plympton site.

"The SA Government has an extra $230 million in revenue this year - some of it raised through payroll taxes and charges paid by Ion workers - so it can afford to invest in saving these existing jobs as well as creating new jobs," Mr Hanson said.

For further information

Contact:	Jeremy Vermeesch
Union:	The Australian Workers' Union
Phone:	03 8327 0888
Contact Mobile:	0431 942 977
Fax:	03 8327 0899
Email:	jeremy.vermeesch@awu.net.au
WWW:	http://www.awu.net.au

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