Thomson deregistration: breach of independence

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The registration of Ms Louise Thomson to act as a bankruptcy trustee has been cancelled, following an investigation and disciplinary committee hearing.

In 2019, AFSA staff, acting on behalf of the Inspector-General in Bankruptcy, Hamish McCormick, investigated instances of misconduct that called into question Ms Thomson’s independence, judgement and general suitability to remain registered as a trustee.

The Inspector-General referred the matter to a disciplinary committee on 28 November 2019, and on 30 July 2020, the committee concluded that Ms Thomson’s registration should be cancelled.

The committee accepted the Inspector-General’s concerns regarding Ms Thomson’s independence as a trustee in bankruptcy, and her dealings where it was evident that there had been a conflict of interest.

The committee found that Ms Thomson had a conflict of interest in accepting referrals of work, while acting as the referrer’s bankruptcy trustee.

While acting as the bankruptcy trustee, Ms Thomson socialised with the bankrupt and allowed him to vote in favour of her proposed remuneration. The committee also found that that decisions concerning the bankrupt being permitted to travel overseas were discussed while socialising with him over lunch, and those decisions were not sufficiently documented nor properly based on objective criteria.

Ms Thomson allowed the bankrupt to travel without appropriately scrutinising the source of funding for international holidays, and did not conduct appropriate investigations into his assets or income.

The Inspector-General in Bankruptcy explained that it is a condition of registration that trustees maintain high professional standards.

“Registered trustees in bankruptcy play an important part in Australia’s financial system,” Mr McCormick said.

“They are entrusted to administer estates and strive for fair outcomes for all stakeholders. It is critical that insolvency professionals should be, and must also be seen to be, impartial and independent.

“To be a registered trustee, you must meet requirements under Commonwealth legislation.

“In addition to meeting legal requirements, AFSA expects registered trustees to be trustworthy, competent and impartial professionals who consistently act with integrity.

“Both AFSA and the disciplinary committee found that Ms Thomson failed to meet these standards.

“AFSA does not hesitate to take appropriate action against trustees if they are not fit to maintain their registration.”

Further details, including the committee’s report and the reasoning for its decision can be accessed on the De-registered trustees list.