Breach Of Director’s Duties.

Breach Of Director’s
Duties
ASIC v Flugge (No2) [2017] VSC 117
(sequel to ASIC v Flugge & Geary)

Case Introduction
•Civil proceeding was brought under the Corporations Act
2001 (Cth) by Australian Securities and Investment
Commission (ASIC) against the chairman of AWB Limited
(AWB), Mr. Flugge
•Allegations against him were breach of his duties as a
director under the sections 180 and 181 of the
Corporations Act
•The breach was arising out of the conduct of AWB in the
United Nations ‘Oil-for-Food Program’ for the selling of
wheat to Iraq
•Allegedly the price for the purported fees of the inland
transportation that were being made to Alia, a company of
Jordanian origin that is partly seen to be owned by the
Ministry of Transport of Iraq

Case Introduction
(Contd.)
•The payment of the fees for the inland transportation has
been alleged by ASIC to be a sham
•It was further alleged to be a means for Iran to be obtaining
currencies that have been internationally traded
•ASIC alleged that the chairman Mr. Flugge was
knowledgeable of the act of AWB in contrast to the United
Nations sanctions in relation to the payment of fees of the
inland transportation
•it was done with the money that had been obtained from
the escrow account of United Nations.

Case Introduction
(Contd.)
•It was further alleged that stated that even if it
was not known to him yet he was sufficiently
notified
•For the notification if he had enquired into would
have been alerted towards the breaches of the
sanctions of the United Nations