ASIC v Southcorp Limited (No 2) [2003] FCA 1369 (27 November 2003)

ASIC V Southcorp
Limited (No. 2)
[2003] FCA 1369 (27
November 2003);
203ALR 627; 22ACLC
1
Running Head: CORPORATE LAW 0
Student’s Name

CORPORATE LAW 1
Contents
Introduction......................................................................................................................................2
ASIC v Southcorp Limited (No 2) [2003] FCA 1369 (27 November 2003); 203 ALR 627; 22
ACLC 1............................................................................................................................................3
Facts.............................................................................................................................................3
Duties/Responsibilities Breached................................................................................................4
Why Duties were breached..........................................................................................................5
Court’s Decision..........................................................................................................................6
Impact of Court’s Decision on Companies in Australia..............................................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

CORPORATE LAW 2
Introduction
As corporations are not natural person, it appoint some officers to work on it is behalf. Such
appointed officers hold liability to work honestly and in good faith of the corporation (Carter
Newell Lawyers, 2012). In Australia, to define the duties of directors and officers of a
corporation, Corporations Act, 2001 (Cth) is there. This is an act which governs and regulates
compliance activities of a corporation. Corporations can be of any kinds according to their status.
Such as, some of the corporations are non-listed, whereas some are listed.
Listed entities are those, which have it is shares listed on any recognized stock exchange and
general public has interest in such corporations (State Library Victoria, 2018). On the other side,
some corporations are Non-Listed, these kinds of corporations are usually close one and interest
of public at large does not involve in the same. Further in addition to the provisions of
Corporations Act, 2001, in case of listed entities, listed rule are also applicable. In this scenario it
becomes responsibilities of directors and officers of the corporation to comply with the
provisions of corporations Act, 2001 along with Listed Rules.
It is very general practice that if a person does not fulfill his/her statutory liabilities and duties,
the same become entitled to have a penalty. Similarly, if any of the director or officer of a
corporation does not perform their duties in a manner prescribed then courts has powers to
impose penalty and fine on such person.

CORPORATE LAW 3
ASIC v Southcorp Limited (No 2) [2003] FCA 1369 (27 November 2003);
203 ALR 627; 22 ACLC 1
Facts
In the cited case, Southcorp Limited is a listed entity which is engaged in wine production
business. As earlier discusses, being a listed entity it had to follow the provisions of Corporations
Act, 2001 and Listed Rules. Here, Mr. Glen Cunningham, who was the Executive General
Manager of Corporate Affairs in Southcorp Limited has informed to 11 Analysts about some
important financial decision of corporation via e-mail on 18 April 2002. In the said e-mail he has
wrote that company is expecting to sell it is 2000 vintage super premium vines in financial year
2003. Further he has also added that there will be impact of $30 million on gross profit in
financial year 2003 in comparison to financial year 2004 due to the said sale (Jade, 2018).
Later on, on the basis of information provided in aforesaid e-mail sent by Mr. Cunningham, few
analysts have prepared the report by using their interpretation skills. Due to the said e-mail and
reports, share price of Southcorp has started fluctuating very fluently. It has put adverse impact
on market price of shares of Southcorp Limited.
Further, Australian Securities And Investments Commission (herein after mentioned as “ASIC”),
an authority responsible to look after compliance and fair practicing of corporations in Australia
has brought an allegation to Southcorp Limited that the same has mislead the market and
investors. Due to downfall in share market price of Southcorp Limited, Investors has suffered
with loss. Proceedings has initiated against Southcorp Limited by ASIC.