These .com.au names are taken up by what are known as domain catchers who resell them at a premium, according to Robert Kaay, who runs a domain brokerage company and a Web hosting company.
For example, MelbourneIT, which owns a domain catcher known as Netfleet, could get hold of 10,000 such cancelled domains and earn $800,000 as it sells .com.au domains for $80 apiece.
Asked about this, an auDA spokesperson denied this was the case, saying instead: "When a registrant is found to no longer exist, as in the case of a deregistered company, the domain name licence is deleted in line with auDA policy.
"Ensuring registrants are eligible under our policies is a priority for auDA to manage and we work very closely with the registrar channel to ensure domain licence holders meet the requirements, in addition to investigating and responding to specific cases bought to our attention."
Asked why domain catchers were allowed to capture these domain names and profit from reselling them, the spokesperson said: "Once a domain name is deleted from the registry, it becomes available to be registered on a first come, first served basis provided eligibility requirements are met."
But the spokesperson admitted that there existed a secondary market for such domain names, adding, "It is important to note that in all cases a registrant who may acquire a domain name on the secondary market must meet all of the eligibility requirements to hold that licence."