ASIC obtains declarations against Citrofresh

The Australian Securities and Investments Commission (ASIC) has obtained a declaration against former Citrofresh managing director and chief executive Ravi Narain that he engaged in misleading or deceptive conduct.

The Federal Court found that statements made to the Australian Securities Exchange (ASX) by Narain and by Citrofresh in September 2005 were misleading and deceptive, and in breach of the Corporations Act. The court also found that Narain’s conduct contravened his duty of care and diligence that was required as a director.

ASIC’s claim was dismissed in November 2007 when Narain successfully appealed the court’s decision on the grounds that the announcements made to the ASX did not relate to a financial product because the content did not refer to or deal with shares in the company.

ASIC appealed this decision and an appeals court found there was sufficient connection between the statements and the company’s shares because their content concerned the business of the company and were published on the exchange where the shares were traded.

A further application from Narain to appeal was refused by the High Court in December 2008.

The matter has been listed for further hearing on March 15 to consider whether Narain should pay a pecuniary penalty, whether he should be disqualified from being a company director, and to determine costs.