The auditor for the failed Australian derivatives trader Halifax Investment Services has had his registration cancelled for negligence that prevented the company’s financial problems being detected early.
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The Australian Securities and Investment Commission brought charges against Robert Evett, a director of EC Audit, to a disciplinary board for failing to adequately perform his duties.
The charges, to which Evett admitted, related to his audits of the profit and loss statements and balance sheets of Halifax for the financial years 2016 through to 2018.
The board found that Evett was “not a fit and proper person” to remain registered as an auditor because of serious neglect to perform his duties, which had serious consequences.
“Had Mr Evett performed his duties as required, errors in Halifax’s 2017 financial statements would have been identified and Halifax would have been required to cease trading until it could demonstrate that it met the capital requirements of its financial services licence,” an ASIC statement said.
Halifax, which had an Auckland based operation, collapsed in 2018 and was put into liquidation the following year.
About 12,000 investors in New Zealand and Australia owed $220 million were affected, and there was a shortfall of close to $50m.
Courts in Australia and New Zealand have jointly ruled the company’s assets should be sold and positions liquidated to give an equal distribution to creditors.
