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Business Law Critical Analysis

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Added on  2020-05-16

Business Law Critical Analysis

   Added on 2020-05-16

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Running head: BUSINESS LAWBusiness lawName of the StudentName of the UniversityAuthor Note
Business Law Critical Analysis_1
1BUSINESS LAWTable of ContentsCase introduction.............................................................................................................................2Breach of directors Duties...............................................................................................................3Critical analysis of the decision provided by the judges.................................................................4Future implications of the decision a statutory reminder had been set by the court in relationdirectors duties.................................................................................................................................7References........................................................................................................................................9
Business Law Critical Analysis_2
2BUSINESS LAWCase introduction In the case of Australian Securities and Investments Commission, in the matter of SinoAustralia Oil and Gas Limited (in liq) v Sino Australia Oil and Gas Limited (in liq) [2016] FCA934 it had been ruled by the federal court of Australia that the defendant company is liable to apecuniary penalty worth $800,000 and the chairman of the organization (MrTianpeng Shao) wassuspended for a period of 20 years from taking part in management of any company. Thedecision of the court had been followed by the above discussed penalty and disqualification orderwhere the court ruled that the organization and its director have contravened the provisions of theCorporation Act 2001. The court in this case found that a director does not have the power rightto rely on other directors only because he does not have the capacity of reading, writing orunderstanding English and thus he cannot sign the prospectus of a company withoutunderstanding it. The defendant organization was an Australian holding company of a Chineseorganization which indulged in providing special drilling services to the oil and gas sector. Theorganization raised an approximate $13.6 Million through a public offering and had beenregistered on the ASX on 12th December 2013. An injunction had been obtained by theAustralian Securities and Investment commission in march 2014, through which it blocked theAustralian Bank account of the company after it expressed concerns that the director want totransfer $7.5 million to China. It had been order by the court on 21st May 2015 that a liquidator is to be appointed by thecompany and he is to further make inquiries in relation to the business operations. It had beendeclared by the court that defendant organization had violated the provisions of sections 674(2),
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