ASIC loses legal bid to disqualify Mariner directors
The Australian Securities and Investments Commission (ASIC) has lost a legal action against current and former directors of Mariner Corporation relating to the latter's proposed takeover bid for Austock Group Limited.
In a hearing of the Federal Court of Australia on Friday (19 June) Justice Beach ordered that ASIC's originating application be dismissed and that ASIC and Mariner and its past and current directors provide submissions relating to the question of costs.
In dismissing the application the Federal Court found Mariner had not breached the law and its directors had not breached their duties when making the proposed takeover bid Austock in June 2012.
ASIC had sought financial penalties and disqualification orders against Mariner, its then chief executive and managing director, Darren Olney-Fraser, then director, Donald Christie, and former director, Matthew Fletcher. (Olney-Fraser and Christie resigned their positions in August 2014.)
In previous statement ASIC alleged that "Mariner was reckless as to whether it could perform its obligations under the proposed bid because it did not have the financial resources to fund the bid or any commitment or assurance from another party to fund the bid at the time of the announcement".
ASIC also claimed "the announcement was misleading because the proposed bid was at a price less than Mariner was permitted to offer and because it misled the market as to Mariner's ability to fund the bid."
The regulator also stated "the directors breached their duties by failing to give sufficient consideration to the steps that needed to be taken before making the announcement."
ASIC is currently reviewing the judgment.
AUTHOR
Jason Spits
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