Assignment on Corporate Legal Issues- Company Law
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Added on 2020-05-28
Assignment on Corporate Legal Issues- Company Law
Added on 2020-05-28
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Running head: CROWN CONFIDENTIALCrown ConfidentialName of the StudentName of the UniversityAuthor Note
1CROWN CONFIDENTIALTable of ContentsPart A:.............................................................................................................................................2Corporate Legal Issues faced by Crown Resorts:..................................................................2Role of ASIC:.............................................................................................................................3Possible Remedies:.....................................................................................................................4Bibliography:..................................................................................................................................6Part B:.............................................................................................................................................7Bibliography:................................................................................................................................11
2CROWN CONFIDENTIALPart A:Corporate Legal Issues faced by Crown Resorts:It is the duty of the directors of corporate enterprises to act in the best interest of thecompany. According to the provisions of Section 180 (1) of the Corporation Act 2001 (Cth) thedirectors and other officials of the company are instructed to take due care and diligence inrelation to their operational activities. In this regard, a hypothetical person has been appointed asa director in order to evaluate the depth of such care and diligence and thereby the reasonabilityis analyzed keeping in mind the depth of the decision1. The decision taken must be according tothe interests of the company. In a recent case of ASIC v Cassimatis2, it was held hat in anycondition a reasonable director will not cause breach of the provisions of law. It is mandatory tofollow the law of the land and failure to do to will give rise to serious consequences. Theshareholders in general do not have the authority to ratify the acts mentioned above. In the givenscenario, the directors of crown sports have violated statutory provisions by sending variousagents to China for the recruitment of high roller gamblers3. Gambling is highly illegal in China.The government of China took reasonable steps to arrest the employees of the organizationwhich also included Australians. There has been a decline in the shares of the organization by14% which subjected to major loss which was faced by the company and its shareholders. In thisregard it can be observed that the reputation of the company suffered huge loss as a result of itsactions. In the given scenario, the legal issues of any corporate which have been faced by thedirectors of Crown Resorts Ltd are as a result of the director duties that have been violated by1 Corporation Act 2001 (Cth) at section 180(1)2 (No 8) [2016] FCA 10233 '“Big Gambling”: The Rise Of The Global Industry-State Gambling Complex' (Taylor &Francis, 2018) <http://www.tandfonline.com/doi/full/10.3109/16066359.2014.929118> accessed4 January 2018.
3CROWN CONFIDENTIALthem. The directors as mentioned above have breached the provisions of the Section 180 (1) ofthe Corporation Act 2001 by not acting with care and diligence concerning the business of thecompany.Role of ASIC:The Australian Investment and Security Commission is an independent government bodyin Australia whose purpose is associated with the regulation of companies and securities. Theduty of the Australian Investment and Security Commission is to keep records on the affairs ofcorporate enterprises. The AISC is involved in the regulation of financial services, integratedcorporate, market and consumer credit regulators in Australia4. The commission since timeimmemorial has targeted economic growth by allowing the markets to fund economy. In order toensure the financial stability in Australia, the AISC has played significant role. The AISC haveproved to be beneficial in promoting the level of confidence and trust among consumers andinvestors, ensuring efficiency of markets by providing proper registration services in the longrun. The ASIC has played significant role in bringing action against the organizations whichfailed to act ethically and legally and thereby caused serious loss to the investors and creditors. Ifany violation has been identified in any case, then in such cases the ASIC seeks orders likefinancial penalties and suspension of directors. In the given scenario, it can be observed that theemployees of Crown Resorts have been arrested in China due to the illegal activities committedby it5. In this context, it is the role of ASIC to investigate into the matter seriously. In this regard,it can be stated that such decision taken by the directors may cause serious loss to the company4 Our role | ASIC - Australian Securities and Investments Commission. (2018). Asic.gov.au.Retrieved 3 January 2018, from http://asic.gov.au/about-asic/what-we-do/our-role/5'Home, James, And Don’T Spare The Horses: The Inevitability Of A Second Sydney Casino'(Taylor&Francis,2018)<http://www.tandfonline.com/doi/abs/10.1080/07293682.2017.1319394>accessed 4 January 2018.
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