Directors Duties : Assignment

Running head: DIRECTORS DUTIES
Directors Duties
Name of the Student
Name of the University
Author note

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DIRECTORS DUTIES
Table of Contents
Introduction......................................................................................................................................2
Case introduction (Facts).................................................................................................................2
Directors’ duties violated by the directors.......................................................................................3
Decision of the court........................................................................................................................4
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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DIRECTORS DUTIES
Introduction
The directors of an organization have to ensure that when they discharge their obligation
they should observe an extent of care in diligence in relation to the work. This means that they
should at the least comply with the provisions provided by law in relation to the affairs of the
company. However in case it is found that the directors indulge in the violation of legal
provisions or making the company to do so they would be liable under the provisions of section
180(1). Breaching the provisions would subject the directors to financial penalties along with
suspension from management as deemed fit by the court. The case of ASIC v Padbury Mining
Limited [2016] FCA 990 in an example of such a situation and is discussed below.
Case introduction (Facts)
The federal court had imposed a ban on the directors of Padbury Mining, Terence Quinn
and Gary Stokes for a period of three years along with a financial penalty of $25000 in relation
to the breach of directors’ duties of making disclosure. In this case Mr Terence Quinn and Gary
Stokes had allowed for a release of an ASX announcement advising that a funding of $6 billion
had been obtained by Padbury Mining for the purpose of constructing a deep water post along
with rail network in Western Australia. The funding announcement had been released under the
title of 'Oakajee Funding Secured' on 10th April 2014. The following terms were present in the
announcement:
The company is happy to state that they have secured necessary funding for the
aforementioned construction project. The funding has been given by a private investor, the terms
of which are contained in shareholders’ agreement between the parties. The development of the