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ASIC v Padbury Mining Limited Australian Case Study

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Added on  2021-06-18

ASIC v Padbury Mining Limited Australian Case Study

   Added on 2021-06-18

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Running head: DIRECTORS DUTIES Directors DutiesName of the StudentName of the UniversityAuthor note
ASIC v Padbury Mining Limited Australian Case Study_1
1DIRECTORS DUTIESIntroductionThe paper purports to discuss the case of ASIC v Padbury Mining Limited [2016] FCA990 that lays down discussion in relation to the duties of the directors under the Corporation Act2001 (Cth). The duties of the directors are given by the members of the board of directors of acompany who has been provided with the duties under the provisions of the statute as well as thecommon law. These are the obligations that are known as duties of the directors. These duties aregiven to beneficiaries by the trustees and to the principals by the agent. There are certain dutiesthat are provided to the directors like they owe their duties towards the corporations but not toany individual or employees or shareholders until there is any emergency. The major duty of thedirector is to be loyal towards their company. Another duty is to maintain care of high standardand diligence. The directors of the company must be bona fide to make the company successful.These duties are said to be fiduciary duties that comes under the general laws of Australia. Theseduties of the directors come under the Corporation Act 2001. There are certain facts about thebreach of duties by the directors. It is said that the director should not be dishonest towards thecompany otherwise he will be imposed with criminal charges. The remedy of the breach ofduties is to give equitable damages or recession or compensation. Case IntroductionThe above mentioned case is about the announcement that has been made by thecompany (defendant) in relation to Australian security exchange (ASX). A ban was enforced bythe court on the directors of the organization for a time of three years. There was a penalty ofamount $25,000 that has been forced on the directors of the company for breaching the section180 of the Corporation Act 2001. There was an announcement that was not supposed to be made
ASIC v Padbury Mining Limited Australian Case Study_2
2DIRECTORS DUTIESby the company but the directors did not prevent the company to make the announcement thatthe company will be receiving the fund the amounts to 6 million dollars. This fund was supposedto be used in carrying out a project in the west of Australia. The date in which the announcementwas made is 10th of April 2014 and there are certain terms that are that the announcementconsists. The fund for the project in the west of Australia has been received successfully by thecompany. Midwest Infrastructure Private Limited is a subsidiary company that is fully ownedand the development of the project is to be done by them. There had been an agreement with aprivate investor who agreed to provide funding based on certain conditions. There are certain terms that needs to be complied with the agreement to secure the funding butthe company has failed to mention in the announcement. One of the terms of the agreement hasmentioned that if the bank does not guarantee to 1.3 billion that is needed to be secured by thecompany then the fund will not be procured. However, these terms exist in the agreement, butthere were no steps that were taken by the directors of the company to mention that theagreement is conditional.Australian security exchange has been directed by the company to stop sharing the trade to theorganization which they have asked again to raise them. However significant value of tradinghad been conducted during the period. The organization announced that the agreement with thefinancer have been terminated after the trading has been done in high prices. Breach of duties According to the section 180(1) of the Corporation Act 2001 (Cth) has explained that thedirectors of the company should have at least diligence and care towards the company whiledischarging the duties. In order to search out whether the real director has perceived the
ASIC v Padbury Mining Limited Australian Case Study_3

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