The criticism of the corporate regulator came as the Federal Court heard the directors' appeals against a finding they breached their duties when granting a $33 million listing fee to company founder Bill Lewski.

The directors include former federal health minister Michael Wooldridge and Victorian Liberal Party figure Peter Clarke.

If the court finds ASIC took too long to bring the case, the directors, including Mr Lewski, will be immediately back in business because their bans on running companies will be lifted.

The directors' appeal hangs on whether they signed off on the payment at a July, 2006, board meeting.  ASIC launched its case against the directors in August 2012. It has six years to bring action in corporate cases.

Judge Lindsay Foster took ASIC to task on Tuesday over its decision to wait six years before bringing the case.

"Why wasn't this proceeding started earlier?" Judge Foster asked Ron Merkel, QC, one of four barristers acting for ASIC in the appeal.

Mr Merkel responded: "It took six years."

"Well it might have taken six years and one month," Judge Foster quipped before adding: "It seems like a big shame that the proceeding was not started earlier."

Judge Foster is hearing the appeal alongside Judges Andrew Greenwood and John Middleton.

ASIC has also appealed, asking for heftier penalties against the directors.

Last year Mr Lewski was banned from being a company director for 15 years and fined $230,000, while Dr Wooldridge was banned for two years and three months and fined $20,000. Two other directors – Kim Jaques and Mark Butler – were banned for four years and fined $20,000 each. Mr Clarke was not disqualified but was found to have breached his duties as a director and fined $20,000.

On Tuesday the court also heard Dr Wooldridge believed Prime Trust would be wound up if it did not float in 2007 and in those circumstances Mr Lewski would receive a fee of 2.5 per cent of the company's assets. Instead, Dr Wooldridge agreed to the payment because he believed it was in the best interest of shareholders.

Dr Wooldridge's lawyer Noel Hutley, SC, acknowledged that "one way or another" a payment to Mr Lewski would be "potentially adverse to unitholders".

"But his honour reference in the [original] judgment to such matters as 'you could have gone to ASIC' or 'sued' or the like is, with respect, not realistic."

Mr Hutley asked the court to consider where would that have left the unitholders of Prime Trust, adding: "The cold comfort of suing Mr Lewski? The cold comfort of having it reported to ASIC?"

Details of ASIC submissions are to be heard later this week.

Mr Merkel for ASIC told the court Mr Clarke was challenging the finding his refusal to vote on the payment to Mr Lewski was in effect an approval of deal. "No one else is challenging findings of fact," Mr Merkel said.

In an unusual move, one of ASIC's barristers, Robert Strong, is solely assigned with the task of appealing the findings against Mr Clarke, who stepped down from his high profile role at the state development agency in 2012 after the case was filed.