ASIC had disqualified the Applicant from being an approved SMSF auditor on the basis that he was not a ‘fit and proper person’ but the AAT set aside ASIC’s decision.
The facts are set out in the beginning of the AAT’s decision as follows.
- Mr Abichandani holds various bachelor degrees in commerce and accounting. He has been a superannuation fund auditor since 1995, and a member of the National Institute of Accountants since at least April 2005. Since 2009 he has been a technical consultant, relating to self managed superannuation fund (“SMSF”) issues, to a private company that provides online legal document delivery and management services. Following legislative amendments made by the Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Act 2012, he became registered as an approved SMSF auditor, under the Superannuation Industry (Supervision) Act 1993 (“SIS Act”) – s128B.
- In May 2014 the Commissioner of Taxation, exercising the permission granted by SIS Act s128P, referred to ASIC details of Mr Abichandani’s conduct in relation to the audit of three SMSF funds for the financial ended June 2011. (ASIC is the “regulator” under the relevant SIS Act provisions – see ss 3(1), 6(1) 35C(1).) As a result of that referral, and in the exercise of the power contained in SIS Act s 128D(1), on 1 September 2015, ASIC imposed conditions on Mr Abichandani’s approved auditor registration. One of those conditions required Mr Abichandani to submit three of his 2015 financial year SMSF audits for independent evaluation and report.
- On 7 September 2015 Mr Abichandani, relying on the procedural permission contained in SIS Act s344, sent ASIC an email asking it to remove the independent evaluation condition. He set out five grounds for his request. One of them involved a statement that the three ATO referred audits “were not done by me”. (Mr Abichandani had made a similar statement – “that the audits were done by Mr … Vadher” – in an earlier email to ASIC on 21 August 2015.) But in response to ASIC’s concern, on 18 September 2015, Mr Abichandani conceded that his statement was incorrect, and withdrew his request to remove the independent evaluation condition.
- On 1 October 2015, acting under SIS Act s130F(2), ASIC disqualified Mr Abichandani from being an approved SMSF auditor, with effect from 8 October 2015. In the light of the conceded inaccuracy of Mr Abichandani’s August and September 2015 statements, ASIC was “not satisfied that he did not intend to deceive or mislead ASIC”. ASIC opined that he “knew, or ought to have known” the statements were misleading. ASIC ultimately expressed a positive conclusion that his statements were “untruthful and misleading”. ASIC then determined that the statements demonstrated Mr Abichandani was not fit and proper for registration as an SMSF auditor. (There are seven grounds on which ASIC can make a disqualification decision under SIS Act s 130F(2). One ground is that the person is not “fit and proper to be an approved SMSF auditor”: see SIS Act s 130F(2)(d).)
- ASIC maintained the disqualification in its 30 October 2015 reconsideration decision. That decision is the subject of Mr Abichandani’s review application in the present proceedings.
However, the AAT granted his application to have the decision set aside. It was satisfied in the circumstances that the applicant was a “fit and proper person to be an approved SMSSF auditor” in the light of his uncontested qualifications and experience, his past significant period of registration and the unchallenged and impressive supporting commendations he provided. It also stated that an assessment of the “impugned conduct” on the part of the applicant and its underlying relevance and significance in the circumstances, did not warrant his disqualification.
(Re Abichandani and ASIC [2016] AATA 879, AAT, File No 2015/5994, Taylor SM, 8 November 2016.)
[[2016] AATA 879 – Austlii Report] [FJM] [LTN 219, 11/11/16]
ASIC reinstates Mr Abichandani’s registratlon 8 days later
On 16 Nov 2016, ASIC has advised that the registration of an approved SMSF auditor has been reinstated following a decision by the AAT to set aside ASIC’s disqualification of the auditor.
In Re Abichandani and ASIC [2016] AATA 879, the AAT found that the applicant had not intentionally made false statements to ASIC and he was a “fit and proper person” to be an approved SMSF auditor.
In October 2015, ASIC disqualified Mr Abichandani from being an approved SMSF auditor (refer: 15-356MR).
[ASIC media release] [LTN 223, 17/11/16]