Business and Corporations Law Assignment

Business and
Corporations Law
ASIC v Narain [2008] FCAFC 120

ASIC V NARAIN
Table of Contents
1. Introduction.........................................................................................................................2
2. Facts of the Case.................................................................................................................3
3. Infringement of Duties........................................................................................................4
4. Decision of the Court..........................................................................................................5
5. Relevance of the case..........................................................................................................6
6. Conclusion..........................................................................................................................7
7. References...........................................................................................................................8
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ASIC V NARAIN
1. Introduction
This report will evaluate the case of ASIC v Narain [2008] FCAFC 120 which focuses on the
disclosure regulations given under the Corporations Act 2001 (Cth) (‘the Act’). The case also
evaluates the rule regarding misleading or deceptive conduct which is performed by a person
in relation to financial services and products. This case focuses on the statements made
through letters which were released to the Australian Securities Exchange (ASX) which were
misleading or deceptive. The case also concerns regarding whether the person who is
appointed as the Chief Executive Officer (CEO) and managing director had breached his
duties as a director of the company by authorising or allowing the issuing of misleading or
deceptive statements which are made in relation to financial products. In this case, the
Australian Securities and Investments Commission (ASIC) filed a legal suit against
Citrofresh International Ltd (CIL) and Mr Ravi Narain who was the CEO and managing
director of the corporation. The suit alleged that the two letters sent by the company to the
ASX contained misleading or deceptive content in a number of respects which are made by
the enterprise and the managing director. ASIC argued that CIL had failed to comply with
section 1041H of the Corporations Act 2001 (Cth) (Jade, 2008). As per this section, a person
has a duty to ensure that he/she must not engage in any conduct relating to financial product
or service which is misleading or deceptive or likely to do so. This report will analyse the
facts of this case and evaluate the duties infringed by the directors as given under the
Corporations Act 2001 (Cth). The judgement of the court will be critically evaluated in the
report along with the impact of the case.
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