ASIC v Flugge (No 2) [2017] VSC 117 - Analysis of Breaches of Directors' Duties under the Corporations Act 2001

Corporation law
Case: ASIC v Flugge (No 2) [2017] VSC 117

Table of content
 INTRODUCTION
 a. CASE INTRODUCTION
 b. BREACHES OF DIRECTORS’ DUTIES UNDER THE CORPORATIONS
ACT 2001(CTH)
 c. ANALYSIS OF THE COURT’S DECISION
 d. RELEVANCE AND IMPACT OF THE DECISION
 CONCLUSION

Introduction
• The corporation act 2001 of the Australia states various provisions over
formation, operation and conducting the operations of a business organisation
in Australia.
• This act also defined the general and specific duties of the directors who are
responsible for conducting the operation of the corporations.
• The acts lay out the directors duties with a compulsory imposition to adhere
with such duties without any breach.

a. CASE INTRODUCTION
 Travor Flugge was the chairman and Peter Geary was in the position of Group
general manger in the company Australian Wheat broad Limited (AWB).
 The company was under a contract with Irani government for supplying wheat
to Iraq.
 In 2004 a case against both Flugge and Geary was brought by ASIC
(application-specific integrated circuit) related with payments made to the
Irani government
 . Its was held by the AISC that many of the payments were referable as inland
transportation fees which was defined in the contract.
 It also stated that the Zairian government has evaded the security council
resolutions through bribery, kickbacks and surcharges on oil and illicit
payments in respect of humanitarian goods