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Shafron v ASIC Case Study

   

Added on  2020-03-04

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1Corporate law (Case study Shafron v ASIC [2012] HCA 18)NameCourseProfessorSchoolCityDate
Shafron v ASIC Case Study_1
2a)The relevant facts of the case In Shafron v ASIC case, Mr Shafron was employed by the organization as the secretary and the legal counsel of James Hardie industries Limited (JHIL). 1He was involved in the creation of the actuarial reports through use of the cash flow model. He did not take into the account the superimposed inflation when it came to estimation of the amount which, was needed to fund asbestos related claims. He selected and presented the report to the JHILboard and failed to disclose the estimates which included the superimposed inflation. Additionally, he released misleading information to the Australian Stock Exchange (ASX). 2The ASIC commenced on the proceedings against Mr Shafron on the basis that he was an officer of the JHIL and he breached his duties as an officer under the Act. According to the high court he was an officer of JHIL since he had participated in decision making which affected the substantial part of the business of JHIL during the vetting of the reports which he presented to the board.b) The major legal issues The main legal issue was the failure of Mr Shafron to exercise his power and dis-charge his responsibilities as an officer with the standard of care in addition to diligence which a reasonableindividual would exercise as the officer of the corporation as required under S180 of the Act, the failure to disclose the key omissions in the estimates to the board. Based on the law an individualcan be held as an officer of the corporation even if they are not staff or one of the formally appointed directors. c) The relevant law relied on by the judge(s) in making their decision 1Barber, Fran. "Indirectly directors: Duties owed below the board." Victoria U. Wellington L. Rev. 45 (2014): 27.2Scott, Peter Dominick. "Shafron v Australian Securities and Investments Commission (2012) 286 ALR 612." U. Tas. L. Rev. 31 (2012): 155.
Shafron v ASIC Case Study_2

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