Interesting development unveiled in The Australian
here (behind a paywall).
ASIC knocks on EY’s door over Rex relations; ...
By Yoni Bashan
EY’s corporate undertakers received a knock at the door from the regulator on Thursday with some light questions over its appointment as administrator of downed airline Regional *Express.
“We are engaging with EY to understand the terms of their engagement,” a spokesman for the Australian Securities & Investments Commission told Margin Call.
ASIC’s finest cardigans are apparently trying to figure out if there’s any conflict with EY’s appointment, given they were brought in by Rex to conduct an independent review of the business as early as May. For that they were paid $520,000, and currently there’s no suggestion anything’s amiss. Inquiries, as they say, are continuing.
ASIC’s probing might end up being routine but the rules are the rules and the facts are the facts: external administrators are supposed to be independent of the company and the directors they’re assisting.
With that in mind, consider that EY’s restructuring lead Adam Nikitins, now the administrator, was in the tent with Rex and its investors three months ago and attended basically every meeting up until late July. In that time, discussions shifted from a mere appraisal of the business and a couple of management calls to an escalation with Rex directors around the matter of voluntary administration and “contingency planning”.
EY’s counterargument to any conflict, filed in paperwork to ASIC on Thursday, is one that goes out of its way to assure the regulator that the advice was limited enough to maintain its independence. By its own admission the firm planned for the “possible appointment of an administrator” and held meetings with directors. “Our work was undertaken for the companies only. We did not provide any advice to the directors.”
Hard to be sure, especially when Nikitins was in the room when it happened.
Late on Thursday, EY said their engagement with ASIC was entirely expected for an administration “of this size and this level of community interest”.
...
EY's behaviors as Administrators have been "interesting", their stressing the importance of punters continuing to book on Rex Regional for instance. Another oddly bizarre twist in a series of oddly bizarre twists