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The corporate regulator has “completed its review” into its expenses scandal, including determining whether laws were broken and policies breached by its ousted chairman James Shipton – but it’s refusing to disclose the outcome.

One year ago, on December 17, private investigator Dr Vivienne Thom submitted to government her “independent review” into the scandal at the top of the Australian Securities and Investments Commission (ASIC).

The scandal felled both chair Shipton and ASIC deputy chair Daniel Crennan QC.

Thom’s central recommendation was that ASIC “proceed to finalise the investigation” and establish whether laws and governance policies were broken by Shipton’s charging taxpayers $118,570 for personal tax advice from consultancy KPMG.

It can now be revealed that ASIC did “complete its review of potential breaches of legislation and policy” regarding the Shipton payments – four months ago, in August.

But it’s refusing to say whether any laws or policies were broken – and so whether or not Treasurer Josh Frydenberg, who is responsible for ASIC, was correct to say no wrongdoing had occurred.

“All we can say is ASIC completed its implementation of the recommendations of the Thom Review in August 2021,” ASIC spokesman Gervase Green told The Klaxon.

“ASIC established an executive integrity committee, completed its review of potential breaches of legislation and policy and launched a revised technology‑based compliance incident management (notification) system”.

“ASIC… (has) completed its review of potential breaches of legislation and policy” — ASIC

ASIC’s new chair Joe Longo, its new deputy chair Sarah Court, and its ongoing co-deputy chair Karen Chester – between them being paid $2 million a year by Australian taxpayers – all refused to comment.

Frydenberg and Treasury head Dr Steven Kennedy, who signed off on the $110,000-plus Thom review, are also steadfastly refusing to comment.

The situation is remarkable.

ASIC is responsible for policing Australia’s entire corporate sector and enforcing corporate governance standards.

The case is one of, if not the biggest, corporate governance scandals in Australian history – it occurred at the very top of the corporate regulator itself.

It’s certainly the biggest scandal in ASIC’s 30-year history.

The situation also presents a potentially serious political problem for Frydenberg, who is responsible for ASIC.

“The situation presents a potentially serious political problem for Frydenberg”

Thom submitted her review to Frydenberg, and to Secretary to the Treasurer Kennedy (also answerable to Frydenberg), on December 17 last year.

Frydenberg sat on it for six weeks.

Then on January 29, facing mounting pressure from the public and federal opposition, Frydenberg released a doctored version of Thom’s review that had instead been “prepared by Treasury”.

The doctored, “abridged”, version of Thom’s report re-written by Treasury. Source: Treasury


At the same time Frydenberg announced Shipton had engaged in no wrongdoing, despite providing no evidence to back his claim.

“I am satisfied that there have been no instances of misconduct by Mr Shipton,” Frydenberg announced.

In fact, even the doctored version of Thom’s review made clear the matter was far from over.

ASIC was to “finalise the investigation” and determine whether laws and policies had been broken.

“The review recommends that ASIC should have regard to the findings in this report and proceed to finalise the investigation and review of potential breaches of legislation and policy related to the procurement of tax advice services from KPMG,” Thom wrote.

As previously revealed by The Klaxon, key passages from the document released by Frydenberg on January 29 had been secretly deleted.



Pages 30 and 31 of Frydenberg’s doctored version of the Thom report, deletions shown in red. Source: Treasury. Emphasis: The Klaxon


The saga emerged after Auditor-General Grant Hehir filed official concerns, issuing an extremely rare “section 26” letter to Frydenberg, which ensured the matter became public.

In her review, Thom addressed four of Hehir’s main concerns, providing what she called the “view of the review” under each one.



The Klaxon’s April 22 expose. Source: The Klaxon


Yet three of Thom’s four responses were secretly deleted from the document Frydenberg released.

Only one response was left in.

That response concerned an issue where no wrongdoing was found to have occurred.

Thom, a former public servant, had conducted the ASIC Review for private company CPM Reviews, where she had been one of the company’s top executives for more than four years.

As revealed by The Klaxon, Thom resigned from CPM Reviews almost immediately after Frydenberg released the doctored version of her review.

Thom and CPM Reviews have repeatedly refused to back-up Frydenberg’s claim that no wrongdoing occurred.

(Remarkably, private investigator Thom has emerged again recently, with Prime Minister Scott Morrison earlier this month announcing she has been tasked with investigating allegations against Education Minister Alan Tudge involving a 2017 relationship with a then staffer. Thom’s Tudge investigation is apparently not in connection with CPM Reviews).

All key officials are refusing to back Frydenberg’s claims. Clockwise from top left: Stephen Kennedy, Karen Chester, Sarah Court and Joe Longo.

Every member of ASIC’s existing “commission” – its senior executive, now under chair Longo – has also refused to back-up Frydenberg’s claim that no wrongdoing occurred.


All key officials are refusing to back Frydenberg’s claims. Clockwise from top left: Stephen Kennedy, Karen Chester, Sarah Court and Joe Longo.


So too has Treasury boss Kennedy, who appointed Thom and signed off on the $110,000-plus “independent review” into the scandal.

The only person of authority to claim that no-wrongdoing occurred is Frydenberg himself.

Shipton was just three years into his five-year term when he was ousted over the expenses affair. Longo became ASIC’s new chair on June 1.

Court was appointed to replace Crennan, who left when the scandal broke in October last year, just two years into his five-year term.

Crennan had received almost $70,000 towards the rent of his luxury Sydney family home , $500 a week for over 18 months.

The payments were almost certainly illegal – and Crennan eventually promised to repay them, though only after months of pressure by ASIC’s auditor the Australian National Audit Office (ANAO) – but ASIC is refusing to say.

(Auditor-General Grant Hehir is responsible for running the ANAO).


CPM Reviews – among the many refusing to back Frydenberg’s claims. Source: The Klaxon

The $118,557 payments to Shipton for his own personal “tax advice” were also almost certainly illegal (similarly, Shipton repaid the money, but only after many months of action by the ANAO), but again, ASIC is refusing to disclose the findings.

ASIC’s 2020-21, 272-page annual report, filed with Frydenberg on October 1, makes no mention of ASIC’s findings into whether laws were broken or policies breached.

One way ASIC and its executives are answerable to the public is via parliamentary committees.

The parliamentary committee responsible for “monitoring the activities of ASIC” – the Oversight of ASIC and Takeovers Panel – is due to host its next public hearing in Canberra on February 11.

In her review, Thom made eight recommendations. The recommendation regarding ASIC completing the investigation into Shipton, and determining whether any laws were broken, was by far the most important. (It was recommendation 3, the first recommendation regarding Shipton. The first two recommendations were related to the $69,621 rental payments to Crennan).

The revelations of the ongoing cover-up of the ASIC expenses scandal come ahead of a federal election, which the Morrison Government must hold by May.

Frydenberg’s seat of Kooyong is one of those seats under pressure from independents under the loosely connected “Voices Of” movement.

The independents are campaigning for action on climate change and against corruption, calling for the implementation of a strong federal anti-corruption regulator.

Morrison promised to implement a national integrity commission three years ago but has failed to do so.


The Klaxon’s expose. Source: The Klaxon


Of the models put forward, Morrison’s model for an integrity commission is the weakest and experts say it appears designed to cover up corruption involving federal politicians, rather than to uncover and police it.

(The Centre for Public Integrity, a group run by former senior judges and anti-corruption experts, says Morrison’s model “would hide corruption not expose it”.)

Should an anti-corruption body with teeth be implemented following the upcoming election, alleged corruption at the top of the nation’s corporate regulator – and the subsequent apparent cover-up – would likely to be an area considered for investigation.

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