Key Takeaways
- • ASIC chair Sarah Court told the Senate Economics Legislation Committee on 29 October 2026 that private credit poses rising risks, with poor private credit practices now an enforcement priority.
- • ASIC is tracing $3.4 billion loaned to the Bathla Group across more than 500 companies and 40 lenders, following its collapse.
- • ASIC has issued interim stop orders on the Remara Cash Management Fund (since lifted) and the Ares Global Credit Income Fund in October.
- • Court said ASIC will report shortly on active private credit surveillance, signaling further regulatory measures.
- • The Government's new Statement of Expectations directs ASIC to promote economic growth while maintaining market integrity and consumer protection.
Summary
Australian Securities and Investments Commission (ASIC) chair Sarah Court placed private credit at the centre of her opening statement to the Senate Economics Legislation Committee on 29 October, according to Money Management. Court highlighted the rapid growth of private credit in Australia and its increasingly important role in financing businesses, while emphasising the risks that come with that growth.
The Bathla Group collapse was cited as a key test for the sector. It has raised concerns about whether private credit lenders properly assessed property risks, valued loan security and maintained adequate protections against borrower defaults. Court said ASIC is working closely with administrators to trace $3.4 billion loaned to Bathla across more than 500 companies and 40 lenders. Preliminary investigations are examining how the funds were raised and used, including exposure to retail investors.
Court indicated further regulatory measures for private credit practices. ASIC has already issued several interim stop orders, including on the Remara Cash Management Fund, which has since been lifted, and on the Ares Global Credit Income Fund in October. "We also have active surveillance under way, with poor private credit practices an enforcement priority. We will report on this shortly," Court said.
The update follows Court's June 2026 appearance before the committee, where she addressed the regulator's managed investment scheme efforts and criticism that ASIC is too slow to act on sector misconduct. Since then, the Government has issued a new Statement of Expectations directing ASIC to promote economic growth, unlock investment, support productivity and foster competition while maintaining market integrity and consumer protection. Court welcomed the mandate, stating that strong regulation and economic growth go hand in hand.
Court also outlined ASIC's ongoing investigations into KPMG, covering alleged misuse of confidential client information, whistleblower victimisation and auditor transparency reporting. She called for broader oversight of audit firms, noting that ASIC's current remit is limited to individual auditors and engagements and does not extend to firm-level scrutiny. Recent enforcement outcomes cited included $55 million in combined penalties against Harvey Norman and Latitude Finance, a $7.3 million penalty against Fiducian over misleading ESG statements, and prison sentences for two directors involved in misusing funds.
The Bathla Group collapse was cited as a key test for the sector. It has raised concerns about whether private credit lenders properly assessed property risks, valued loan security and maintained adequate protections against borrower defaults. Court said ASIC is working closely with administrators to trace $3.4 billion loaned to Bathla across more than 500 companies and 40 lenders. Preliminary investigations are examining how the funds were raised and used, including exposure to retail investors.
Court indicated further regulatory measures for private credit practices. ASIC has already issued several interim stop orders, including on the Remara Cash Management Fund, which has since been lifted, and on the Ares Global Credit Income Fund in October. "We also have active surveillance under way, with poor private credit practices an enforcement priority. We will report on this shortly," Court said.
The update follows Court's June 2026 appearance before the committee, where she addressed the regulator's managed investment scheme efforts and criticism that ASIC is too slow to act on sector misconduct. Since then, the Government has issued a new Statement of Expectations directing ASIC to promote economic growth, unlock investment, support productivity and foster competition while maintaining market integrity and consumer protection. Court welcomed the mandate, stating that strong regulation and economic growth go hand in hand.
Court also outlined ASIC's ongoing investigations into KPMG, covering alleged misuse of confidential client information, whistleblower victimisation and auditor transparency reporting. She called for broader oversight of audit firms, noting that ASIC's current remit is limited to individual auditors and engagements and does not extend to firm-level scrutiny. Recent enforcement outcomes cited included $55 million in combined penalties against Harvey Norman and Latitude Finance, a $7.3 million penalty against Fiducian over misleading ESG statements, and prison sentences for two directors involved in misusing funds.
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