Union says ASIC must get to bottom of ION's problems

A major union today called on the corporate regulator ASIC to investigate the troubled car parts producer Ion.

It wants to know why such a healthy company turned sour so quickly.

Creditors' meetings will be held in Melbourne, Sydney and Adelaide to consider the future of the troubled group which employs about 3000 people in Australia, New Zealand and the United States.

The company was placed in voluntary administration last week after a consortium of banks withdrew a A$400 ($431.96) million credit facility only approved three months ago.

Australian Workers' Union (AWU) national secretary Bill Shorten said Ion had been the darling of the stockmarkets a short time ago.

Only three months ago, it was a company to which major Australian banks were prepared to lend A$440 million.

At the annual meeting, the company's auditors, chief executive and chairman all said it was going really well.

"How can a company like this turn turtle so quickly and put a cloud over job security and the reputation of a great auto components supplier?" Mr Shorten said.

"The banks, in the opinion of the AWU, failed to consult other stakeholders before they withdrew the line of credit."

Mr Shorten said although the AWU has yet not seen all the company's figures, he believed the banks could have negotiated a standstill agreement or spoken with customers, suppliers, the workers, to see what else was possible without putting the company into voluntary administration.

"This is what happens in many other examples," he said.

"However, the other question is, if there was a problem with this company, the problem didn't happen in the course of 10 or 14 or 20 days.

"How did the banks miss the sort of problems they're now talking about?"

"If there was a A$200 million shortfall, if there were cost over-runs in their big projects, how come no one saw that?

"We think ASIC need to investigate the quality of information that was available and the role of all the players in allowing such a debacle to occur."

Mr Shorten said he believed the company could restructure and survive.

- AAP