The High Court`s appeal concerns ASIC`s allegation that Mr King is liable under Section 601FD of the Act (which imposes obligations on the «heads» of the responsible bodies) as the «head» of the MFSIM. The key issue before the Court was therefore whether Mr King met the definition of «director» in subparagraph (b)(ii) of the definition of «director of a company» in section 9 of the Act. Any changes to the Company`s officers or their contact details (as held by Companies House) must be reflected in the relevant statutory records and required filings with the Commercial Register. The High Court allowed ASIC`s appeal and held that the definition of «director» in section 9 of the Companies Act 2001 (Cth) (Companies Act) was not limited to those who hold or hold a designated or recognised office which confers rights and obligations within a company. Mr. King was Chief Executive Officer and Managing Director of MFS Ltd (also known as Octaviar Ltd), the parent company of the MFS Group of Companies (MFS Group). The Premium Income Fund (PIF) was the MFS Group`s largest registered managed investment program, and MFS Investment Management Pty Ltd (MFSIM) was the responsible entity. «Depending on how the High Court interprets the existing provision, legislative reform may be necessary to ensure that persons below Suite C who are responsible for a business department or entity and officers of parent companies are adequately covered by the definition of `officer` in the Companies Act,» writes the ALRC. ASIC/King concerned the conduct of Mr King, former CEO of MFS Ltd. MFS Ltd. was the listed parent company of the MFS group of companies. MFS Group`s activities included fund management and financial services, including investments under management. In certain circumstances, it is a criminal offence to fail to provide information or documents requested by an official authorized by law.
Presenting a false or misleading document may also be a criminal offence. Last week, the Australian Law Reform Commission stressed the need to extend management responsibility to those below senior management who are responsible for a department or business unit and to executives of a parent company, on the other hand. The majority also held that the statutory purpose of the Companies Act «to protect shareholders and creditors» would be nullified if the CEO of a parent company of a corporate group, who effectively determines the course of a subsidiary`s financial affairs, could avoid liability by avoiding any formal designation of his responsibilities. The majority recognized that a person outside a group of companies may also be a «senior officer.» For example, a counterparty to a transaction that has legal rights against a company may interfere with the decision-making process to become an executive. However, this would depend on the circumstances of the case in terms of the nature and extent of the counterparty`s control or its ability to control management`s decision-making of the entity. The High Court considered both textual considerations and the legal context, history and purpose of the definition of «officer». Company Officers is the name generally given to the directors and secretary of a registered company. They are officers of the Corporation and, upon appointment, are authorized to direct and represent its affairs and interests. A UK company must have the appropriate senior managers to cover all the periods during which it exists. The register of directors and the register of secretaries shall indicate at all times the current and former residents of these positions.
This may mean that a lender that manages how a business tries to get out of financial difficulties may fall within the definition of `senior manager` in point (b). An officer (AO) is a person appointed by a government agency or agency to perform specific compliance and enforcement tasks. According to paragraph (a) of the definition of «officer» in the Companies Act (§ 9), a person who is a director or secretary of a company is an «officer of the company». Paragraph (b) states that a person «who makes decisions affecting or participates in all the activities of the corporation or a substantial part of its business» (subparagraph (b)(i)) or «who is in a position to significantly influence the financial capacity of the corporation» (paragraph (b)(ii)) is an officer of the corporation. All such persons may be subject to the same duties and obligations as a director of the Corporation, including the duties and obligations of Part 2D.1 and/or Section 601FD of the Business Corporations Act. Lyrically, the Court held that a literal application of paragraph (b)(ii) does not require a person to act in an «office» within the enterprise. The Court of Appeal rejected a literal interpretation because it would have the unintended consequence that persons who have nothing to do with the management of a business would be considered «officers». According to this reading of the definition, «outside advisers, bankers and the Commissioner for Taxation» would be covered by the definition.
Accordingly, the Court of Appeal considered the ordinary meaning of the term «officer» as an office holder. On November 27, 2007, MFSIM and MFS Group executives, including Mr. King, drew US$150 million from RBS`s loan facility, of which US$103 million was used to settle debt owed by another MFS company. The debt in question was not related to the PIF or MFSIM, and the PIF did not receive any benefit or consideration. This use of PIF funds was «approved and approved» by Mr. King. If an employer fails to pay for an employee`s long-term leave in full on the date of termination of employment, he or she may be prosecuted for a criminal offence before the Industrial Division of the Court of First Instance. Only the Salary Inspectorate or an authorized official may initiate proceedings. Trade unions and other groups of workers cannot take legal action. The Queensland Court of Appeal had held that Mr.
King, who was managing director of the listed parent company of a group of companies (MFS Ltd), was not an «officer» of any of the subsidiaries because he did not hold a recognized position with rights and obligations in the subsidiary. In a statement welcoming the decision, ASIC Commissioner John Price said the decision provided «clear guidance on who is a `senior executive` of a company. Price added that the decision «sends a clear signal to anyone running a business – in name or by fact – that they should be responsible and held accountable for their actions.» Yes. Under the Act, an officer of a corporation may be held liable for the conduct of the corporation if he or she authorized or permitted the conduct or knowingly affected in any way (whether by act or omission). Nor did Justices Nettle and Gordon accept that bankers and other third parties could never fall within the definition of a «manager.» For example, Justices Nettle and Gordon explained, «Lenders who manage how a business tries to get out of financial difficulties can pose real problems in applying these provisions.» If the officer is found guilty, he or she would then be responsible for criminal penalties and/or convictions, as would society. Justices Nettle and Gordon noted that in large, publicly traded companies, there is significant flexibility for people outside the board to have a significant impact on a company, and that modern corporate groups are often led by key group directors or executive committees of the holding company. whose decisions are implemented on a group basis rather than on a company basis and implemented in the various group companies. 10.
In March, the Australian Law Reform Commission (ALRC) issued an update following the publication of its November discussion paper, in which it indicated that the ALRC considered the High Court`s decision to be relevant in the context of considering whether the current definition of «agent» in the Act should be expanded or clarified at a later date. close the accountability gap below the board level. The Victoria Environmental Protection Agency appoints officers authorised to inspect the premises and enforce the Environmental Protection Act 1970.  The matter focuses on the interpretation of the definition of «senior officer» in section 9 of the Companies Act, 2001 (Cth) and, in particular, whether a chief executive officer of a group who was involved in the management of a subsidiary but did not have a designated «officer» within the subsidiary, met the definition of «senior officer» for this subsidiary. Second, Article 179(2) expressly provides that `Article 9 defines both the director and the manager. In addition to directors and secretaries, civil servants also include other persons who manage the company or its property (for example, receivers and liquidators). According to the majority judgment, this confirms that the definition is intended to cover those who manage the corporation or its property, as opposed to those who may influence the corporation by exercising rights as consideration for a transaction.