Australian Securities and Investments Commission v Sino Australia Oil & Gas Ltd [2014] FCA 565

Australian Securities and Investments Commission v Sino Australia Oil & Gas Ltd [2014] FCA 565

The Court extended the restraint order because ASIC was conducting an ongoing investigation into possible contraventions of the Corporations Act 2001 (Cth), Sino Australia and Mr Shao had potential statutory liability to investors, the investors were aggrieved persons, and it was necessary or desirable to preserve the IPO funds in Australia for the protection of investors where those funds were the subject of the investigation and were the company's only substantial assets in Australia. The potential prejudice to the company did not outweigh the need to preserve the funds.

Jurisdiction
Australia
Judgment Date
30 May 2014
Procedural Posture
Application for Injunction Under S 1323(1) of the Corporations Act 2001 (cth) / Application by ASIC for a Further Three Month Extension of an Ex Parte Order Restraining Transfers From Sino Australia Bank Accounts
Outcome
ASIC's application was granted; Order 1 of the orders made on 29 May 2014 was extended until 4 pm on 28 August 2014, with limited exceptions for specified expenses.
Legal Topics
['asic Investigation' 'injunction Under S 1323 of the Corporations Act 2001 (cth)' "protection of Investors' Interests" 'prospectus Disclosure' "directors' Duties" 'market Misconduct']
['corporations' 'securities Regulation'] ['asic Investigation' 'injunction Under S 1323 of the Corporations Act 2001 (cth)' "protection of Investors' Interests" 'prospectus Disclosure' "directors' Duties" 'market Misconduct']

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Procedural Posture

Application for Injunction Under S 1323(1) of the Corporations Act 2001 (cth) / Application by ASIC for a Further Three Month Extension of an Ex Parte Order Restraining Transfers From Sino Australia Bank Accounts

Legal Issues

  1. 1 ["Whether the Court's powers under s 1323 of the Corporations Act 2001 (Cth) were enlivened." "Whether it was necessary or desirable to extend the restraint order to protect investors' interests." 'Whether discretionary considerations made the injunction disproportionate or undesirable.']

Ratio Decidendi

The Court extended the restraint order because ASIC was conducting an ongoing investigation into possible contraventions of the Corporations Act 2001 (Cth), Sino Australia and Mr Shao had potential statutory liability to investors, the investors were aggrieved persons, and it was necessary or desirable to preserve the IPO funds in Australia for the protection of investors where those funds were the subject of the investigation and were the company's only substantial assets in Australia. The potential prejudice to the company did not outweigh the need to preserve the funds.

Court Disposition

ASIC's application was granted; Order 1 of the orders made on 29 May 2014 was extended until 4 pm on 28 August 2014, with limited exceptions for specified expenses.

Orders

  • ['Subject to paragraph 2, pursuant to section 1323(3) of the Corporations Act 2001 (Cth), until 4pm on 28 August 2014 the First Defendant and the Fourth Defendant are restrained from transferring any funds out of the HSBC Business Transaction Accounts numbered 342011-475068001 and 342011-475068002 held in the name...