May 21, 2012

Referral of Craig Kelly MP to Standing Committee of Privileges & Members’ Interests

ANTHONY ALBANESE – Madam Deputy Speaker, I wish to raise with you a matter of privilege concerning the Member for Hughes [Craig Kelly] and his apparent failure to comply with the resolution of the House which requires members to register certain private interests. 

A resolution is in place requiring all members to register certain interests and to report changes to those interests within 28 days, as you are aware.  Any member who fails to provide an accurate declaration of their interests or fails to report changes within the required time frame is guilty of a serious contempt of the House.

I have reason to believe that the Member for Hughes has failed to honour his obligations under this resolution.  I informed him earlier today that I would be raising this issue and, I must say, he proclaims his innocence of these matters.  It appears the Member may have failed to declare directorships of several companies, failed to declare potential liabilities arising from the collapse of a company with which he was involved, failed to declare possible criminal charges arising from that collapse and failed to declare that he has been practising as a solicitor at the same time as serving as a member of the House.

For the benefit of the House, I will briefly outline the facts that I say potentially constitute contempt against the House.  I refer to paragraph 2(d) of the House resolution.

The Member for Hughes has failed to declare registered company directorships for several companies, including Homewares Depot Pty Ltd – the Member was a director until 25 March 2011, but this was not declared.  He was also the company secretary, but the Member failed to declare this on his Register of Interests too.  The Member was a director of Valentino Franchising Pty Ltd until 25 March 2011 but failed to declare this.  The Member was a director of Valentino Home Fashion Pty Ltd until 8 March 2011, but once again the Member failed to declare this.

For the benefit of the House, I table an extract from the relevant Australian Securities and Investments Commission database documenting the member’s involvement with the companies in question.

I also refer to the Member’s Statement of Registrable Interests for the 43rd Parliament lodged on 25 October 2010 and I table that document.  At item 4 of that statement, ‘Registered directorships of companies’, the Member has entered ‘nil’.  In contempt of the resolution of this House, the Member has failed to declare the company directorships to which I have just referred.

What is perhaps more concerning is the Member’s failure to notify the House of the shadow director role that he allegedly played in another company.  In a report of February 2012, the liquidators of the Member for Hughes’s family company have raised questions about whether he was acting as a shadow director at the time of the collapse.  These very serious questions were highlighted by reports appearing on the Crikey news website.

DV Kelly Pty Ltd, for whom the Member worked as an export manager prior to entering the parliament, closed its doors earlier this year.  At the time of its collapse, DV Kelly Pty Ltd, the Member’s family company, owed $4 million to creditors.  Worryingly, this includes $325,540 in unpaid wages, superannuation and leave owed to 12 ordinary Australian workers, and $760,000 owed to the Australian taxpayer through the Australian Taxation Office.

The Member might say the shadow directorship was too uncertain to require declaration under rules for company directors.  This is a matter that the Privileges Committee will ultimately have to determine.  However, even if the Member were not required to declare his involvement with DV Kelly Pty Ltd under the rules for company directors, which I dispute, he was required to declare it.

Paragraph 2(m) provides that Members must declare any interests of any kind where a conflict with their public duties could foreseeably arise or be seen to be arising.  That is certainly the case here.  The liquidators report that DV Kelly Pty Ltd may have been trading while insolvent, a grave allegation which could carry significant consequences, importantly for the ability of the member to continue his parliamentary career.

Under the Corporations Act 2001, directors, including shadow directors, of companies trading while insolvent can face civil penalties of up to $200,000 and may be held personally liable for debts incurred.  Recall that at the time of the collapse DV Kelly Pty Ltd owed $4 million to creditors.  As you would be aware, under section 44(iii) of the Australian Constitution, any person who is an undischarged bankrupt is disqualified as a member of the House of Representatives.

Thank you, Madam Deputy Speaker.  That raises a serious issue with regard to the liabilities that could potentially be incurred there and, in addition, to the potential penalties to which they would be subject.

Finally, we come to the question of the member for Hughes practicing as a solicitor while at the same time serving as a member of the House.  There have been reports that after ceasing employment with this company the member represented in several outstanding legal matters.  A search of court databases confirms the member’s involvement in this litigation.  I table another document.

I refer the House again to the resolution concerning registration of interests, in particular paragraph 2(j), which provides that members must declare any substantial sources of income.  If the member for Hughes was receiving any income as a result of his involvement in these legal proceedings – even if only costs were incurred in DV Kelly’s favour – was this otherwise an interest that might conflict with the member’s official duties within the meaning of paragraph 2(m) of the resolution?

I submit the matters I have outlined today indicate the Member for Hughes may have failed to satisfy his obligations under the resolution concerning registration of interests and in doing so may have committed a serious contempt against the House of Representatives.  This is an issue that should be referred to the House Standing Committee of Privileges and Members’ Interests.  In my submission I ask that you consider these matters with a view to allowing precedence.  I table the document.