Australian Securities & Investments Commission v Maxwell & Ors (No 2) [2006] NSWSC 1333

Australian Securities & Investments Commission v Maxwell & Ors (No 2) [2006] NSWSC 1333

Although George Nahed was not found personally liable for the companies' contraventions or in breach of ss 180(1) or 181(1), companies of which he was a director repeatedly contravened the Corporations Act fundraising and related provisions to the prejudice of the public. His lesser culpability placed him at the lower end of those involved, but aggravating factors included continued disbursements after Mareva orders while he was sole director, the larger losses and number of investors in the Procorp Scheme, absence of personal loss, lack of participation, lack of contrition, and lack of evidence that he understood directors' responsibilities. Balancing those matters, a five-year...

Jurisdiction
Australia
Judgment Date
17 October 2006
Procedural Posture
Corporations Directors and Officers Disqualification / Ex Tempore Judgment on Consequential Orders Against the Twenty Second Defendant After Findings Delivered on 10 October 2006
Outcome
George Nahed was disqualified from managing corporations for five years from the date of the orders.
Legal Topics
['director Disqualification' 'fundraising Provisions' "directors' Duties" 'contraventions by Corporations' 'mareva Orders']
['corporations Law'] ['director Disqualification' 'fundraising Provisions' "directors' Duties" 'contraventions by Corporations' 'mareva Orders']

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Procedural Posture

Corporations Directors and Officers Disqualification / Ex Tempore Judgment on Consequential Orders Against the Twenty Second Defendant After Findings Delivered on 10 October 2006

Legal Issues

  1. 1 ['Whether George Nahed should be disqualified from managing corporations under the Corporations Act 2001 (Cth), ss 206D(1) and/or 206E(1).' 'What period of disqualification was appropriate where companies of which George Nahed was a director had repeatedly contravened provisions of the Corporations Act 2001 (Cth), but he had not been found personally liable or in breach of ss 180(1) or 181(1).']

Ratio Decidendi

Although George Nahed was not found personally liable for the companies' contraventions or in breach of ss 180(1) or 181(1), companies of which he was a director repeatedly contravened the Corporations Act fundraising and related provisions to the prejudice of the public. His lesser culpability placed him at the lower end of those involved, but aggravating factors included continued disbursements after Mareva orders while he was sole director, the larger losses and number of investors in the Procorp Scheme, absence of personal loss, lack of participation, lack of contrition, and lack of evidence that he understood directors' responsibilities. Balancing those matters, a five-year...

Court Disposition

George Nahed was disqualified from managing corporations for five years from the date of the orders.

Orders

  • ['Pursuant to the Corporations Act, ss 206D(1) and/or 206E(1), the 22nd defendant, George Nahed, is disqualified from managing corporations for five years from the date of these orders.' "Liberty is reserved to ASIC to apply in connection with the funds the subject of the undertaking previously given by Chaon...