Corporate Law Assignment : ASIC
Added on 2021-02-21
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CORPORATE LAW
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1Explaining the case and parties involved in this case with describing their positions ...............1Primary legal issues in relation to officers and the directors duties within the case...................1Penalties charged to the parties in the case..................................................................................2Actions that are to be taken by the directors and the officers at the time when it was beendiscovered that the company had become insolvent ...................................................................3Describing Why was ASIC is involved and where there are any other authorities are involvedin the case?...................................................................................................................................3Interesting Observation and comments from writers relevant to this case study........................4Reflection with regards to this case and describing what does it teach us about the expectationof those who manage companies in Australia..............................................................................5REFERENCES................................................................................................................................6
INTRODUCTIONExplaining the case and parties involved in this case with describing their positions In the month of June 2000, HIH insurance has paid an amount of $10 million for the unitin the trust which was been controlled by Mr. Adler. At that time he was managing the companyas a non-executive director. Adler has controlled a trust through the Adler corporation and thePacific Eagle Equity Pty. The Adler corporation was been considered as the PEE's sole memberor the shareholder. The asset within the trust which is managed by PEE were counted as thetechnology stocks and such stocks were worth as substantially than the value of $10 million(Saunders, 2019). PEE has made use of the part amounted to $10 million for purchasing the HIHshares. Alder corporation also had the substantial shareholding in the HIH and no approval wasbeen received for loan. ASIC had commenced its proceedings against Adler, Fodera andWilliams for contravening related party transaction, duty provisions of the directors as per thecorporation law 1998 and the financial assistance. Primary legal issues in relation to officers and the directors duties within the case.In the judgement of HIH and HIHC were been held within the circumstances that arefound to as contravened by the parties as follows:a. s 208 of corporation law states the laws relating to the related party financial benefitsenjoyed by the parties without the approval of shareholder by paying of $ 10 Million tothe AEUT in circumstances. b. s 260 A includes the rules in relation to the financial assistance for purchasing of theshares under corporation law by making payment of the amount equates to $ 10 millionthat is been followed by purchasing of the shares by AEUT from the part of $ 10 millionunder the [182], [355], [183]. Section 180 of Corporation law provisioned the duty of directors to act with due diligenceand care which means that the officers and the directors must discharge their powers withproper care (Directors Duties and ASIC v Adler, 2018). Section 181 of Act reflect that the directors should have to make the decisions in a goodfaith towards the best interest of an enterprise without the personal interest.Section 182 of the Corporation Law provides for avoiding the improper use of theposition within which it has been provisioned that any director, employee and the officer1
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