The Australian Security and Investment Commission (ASIC) is planning to appeal the Federal Court’s decision to dismiss charges against the founders of defunct telco player, One.Tel.
Legal proceedings were instigated by ASIC against the failed company’s three executives and one non-executive director back in 2001.
On November 18, 2009, the NSW Supreme Court dismissed ASIC’s civil penalty proceedings against One.Tel’s former joint managing director, Jodee Rich, and the company’s finance director, Mark Silbermann.
Proceedings were initially brought against the two former directors for allegedly not coming clean on the financial status of the company before its collapse in 2001, ARN wrote at the time. The two were being sued for $50 million by ASIC. The industry watchdog now has until February 27, 2010, to commence an appeal of the NSW Supreme Court decision.
A highly public company failure, One.Tel owed creditors around $600m when it collapsed|new]]. Its biggest creditors included Lucent and Compaq.
ASIC’s original proceedings also included One.Tel joint managing director, Brad Keeling, and chairman, John Greaves. Both agreed to settlements in 2003 which saw Keeling disqualified from acting as a company director for 10 years and paying compensation of $92m. Greaves, meanwhile, was disqualified from being a director for four years and liable for $20m.
In a statement last week, ASIC chairman, Tony D’Aloisio said the One.Tel case provided important guidance to executives and directors on the exchange of information between the board and management. It also identified the right of defendants not to give out discovery or file witness statements until evidence by ASIC witnesses was concluded, he said.
“Additionally, the case has shed light on several important legal issues, notably the additional responsibilities of the chairman of a public company, particularly one with a finance/accounting background and considerable experience on public boards,” he stated. “The case has also provided important guidance to ASIC on how to run similar matters in the future.”
ASIC is now reviewing the judgement in detail and hopes to commence the appeal as soon as possible.