Senator Nick Xenophon has called for an independent inquiry into the Australian Securities and Investments Commission (ASIC) and the company which “made a killing” after floating Dick Smith Holdings for $520 million.
Standing outside a Dick Smith store in Adelaide this week, the senator told reporters “some real questions [have] to be asked here about our level of corporate governance, and if our watchdogs have acted adequately or not”.
Senator Xenophon said a Senate inquiry was required to get to the bottom of the affair.
“There seems to have been a systemic failure of our corporate regulatory structure, whether it’s the case of the watchdog, the auditors, or the private equity firm which made a killing when they floated Dick Smith just two years ago, whether they should be held accountable.
“The fact is, this shouldn’t have happened. The employees of this company deserve answers.”
Private equity firm Anchorage Capital Partners (ACP) floated Dick Smith in December 2013 at $2.20 a share, valuing the company at $520 million. Its shares closed at 35.5 cents after a trading halt and a receiver and administrator were appointed soon after.
Senator Xenophon denied he was blaming ACP but said the equity firm owes shareholders, employees and customers an explanation.
“There’s the immediate issue of the 3,300 employees of Dick Smith who deserve to have a secure future. And to the tens of thousands of consumers who’ve been left in the lurch because vouchers and lay-bys may not be honoured.
“It’s important that the company that made $400 million when floating Dick Smith … ought to stump up the funds to ensure employees and customers aren’t left in the lurch.
“I think it’s about time we put the blowtorch on some of these private equity firms. It could well be all within the law, but if that’s the case – maybe the law needs to be changed.”
