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Directors’ Obligations to Furnish Information to Administrators

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By Ryan Attard, Law Clerk, and Alicia Hill, Principal

On 30 July 2020, the Federal Court of Australia (‘Federal Court’) issued orders In the matter of Union Standard International Group Pty Ltd (Administrators Appointed) (No 2) [2020] FCA 1111, restraining the director of a company in voluntary administration from handling company information that was requested by the Administrators.

This case serves as a reminder to companies in administration to ensure full compliance with reasonable information requests from administrators while also demonstrating the complexities in document management and the risks improper data handling can have on the work of administrators.


Peter Krejci and Andrew Cummins (‘the Administrators’) act as the voluntary administrators for Union Standard International Group Pty Ltd (‘the Company’). The Company operated under the brand USGFX as a financial services business dealing with derivative, foreign exchange contracts, banking markets, and providing general financial product advice. Its AFS licence was suspended by ASIC on 15 July 2020.

The Company’s sole shareholder is Union Standard Group International Holdings Ltd (USG Holdings) which is registered in Samoa. Its director is Mr Soe Hein Minn (‘Mr Soe’) who is resident in Myanmar. USG Holdings operates out of Taiwan, with the company’s website, trading software, and funds located there.

The Company’s data is held on four servers in London, New York, Tokyo, and Cyprus. The servers are managed by UK firm Beeks Financial Cloud Ltd. The Company has a software licence agreement with MetaQuotes Software Corporation which is registered in the Bahamas and operates out of Cyprus.


The Administrators initiated proceedings in the Federal Court of Australia due to the non-compliance of Mr Soe in providing relevant information. They sought ‘administrator access’ to all servers which would allow them to view all trading information for the Company and its clients, giving them further assistance in their efforts to recoup any offshore funds.

The Administrators had previously applied to the Federal Court for an extension of the convening period of the second meeting of creditors. In allowing that application, the Court cited similar issues:

  • the access of information, namely that an excess of $15 million was held offshore;
  • the limited access to corporate financial records
  • the Company’s complex structure which was somewhat ambiguous due to minimal cooperation by Mr Soe.

The Administrators applied for directions under section 90-15 of the Insolvency Practice Schedule (‘the Schedule’) for the servers used by the Company to be turned off and put offline in order for them to undertake a forensic analysis of the information without the interference of Mr Soe or any clients. The Administrators also claimed this would protect the data from the risk of being deleted before it could be properly analysed.


His Honour Justice Stewart ordered that Mr Soe, who joined as Respondent, was to provide the Administrators all passwords, digital keys, or other information that would provide immediate ‘administrator access’ to all relevant platforms and servers. Mr Soe, and his servants and agents, were also ordered to restrain themselves from using the ‘administrator access’ or changing or deleting any of the records.

His Honour determined that access should have been provided by Mr Soe as the usernames, passwords, and other digital and electronic keys that give ‘administrator access’ relate to ‘information about the company’s business, property, affairs [or] financial circumstances’ under the meaning of section 438(3)(b) of the Corporations Act 2001 (Cth) (‘the Act’).  His Honour determined that administrators, had equal standing to officers of the company, and is entitled to the same level of access as Mr Soe in his capacity as director.

In the judgment, His Honour focused on the need for urgency as there were concerns relating to clients of Union Standard and Mr Soe tampering with information and deleting it, making it difficult for the Administrators to accurately understand the position of the company and recuperate any losses.

However, His Honour decided not to make the orders sought by the Administrators to shut down the servers as it was determined to be too risky. This was because placing them offline could wipe vital information and be detrimental to individuals who still rely upon them for information.  His Honour felt that as another remedy was available that would avoid these risks, this should be ordered as an alternative.

Power of the Court to issue directions

This matter demonstrates the Court’s significant power to make directions under section 90-15 of the Schedule. This was recently reiterated in the matter of Kelly (in the matter of Halifax Investment Services Pty Ltd (in liquidation) (No 8) [2020] FCA 533, with Justice Gleeson noting the Court held “very broad” powers (at [51]).

It is also important to note the onus the Court put on the protection of the persons who occupy the role of the Administrator. As proposed in Ansett, this is because Administrators will have “protection against claims that they acted unreasonably or inappropriately or in breach of their duty in making the decision or undertaking the conduct” should they act in accordance with judicial directions. This means section 90-15 directions are utilised to uphold the position of the administrator in their role with the company, not to merely determine rights and liabilities in a particular instance.

Overall, this matter serves as a reminder of the growing complexity of matters due to more companies operating across borders, with financial services and data located in different jurisdictions. For companies entering voluntary administration, directors cooperation with administrators and clarity in data handling will ensure that referral of matters to court do not occur and the costs of administration are reduced due to the avoidance of unnecessary work due to issues in attaining key information.

If you have any queries regarding your obligations as a liquidator, please do not hesitate to contact Alicia Hill on 03 8540-0200 or alicia.hill@mst.com.au