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As a director, he was required to act, exercise and discharge his duties in accordance to Section 180, Section 181, Section 182 and Section 183 of the Corporation Act. He however failed to do so, for example when he authorised the issue of a prospectus by HIH Holdings (NZ) Ltd for the purpose of raising up $155 million of convertible notes to assist HIH in funding the takeover of the FAI. The prospectus failed to disclose the effect of a simultaneous transaction between HIH and Societe Generale Australia Limited (SGAL) where SGAL taking up a priority allocation of the notes for the sum of $35 million, in exchange for HIH depositing approximately the same sum with SGAL in a swap arrangement. The actual effect of the transaction was that HIH in fact bore the financial risk on the $35 million of converting notes rather than SGAL as the prospectus
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THE IDENTIFIED CORPORATE GOVERNANCE BREACHES
Based on the study and analysis of the case, it is discovered that the breaches including but not limited to the following have occurred in HIH case:-
5.1 breaches of directorial duties, or duties as an officer
Three directors namely Rodney Stephen Adler, Raymond Reginald Williams and Dominic Fodera have committed breaches of those statutory duties as director or officer by reason of their respective involvements in a payment of $10 million by HIHC to a company of which Rodney Stephen Adler was a director. There was no approval or ratification obtained to these transactions from investment committee or board.
They have therefore acted in contravention of Section 180 (lack of care and diligence), Section 181 (lack of good faith and proper purpose), Section 182 (improper use of position) and Section 183 (improper use of information) of the Corporation Act. They were found guilty of criminal charges under the Corporation Law by the New South Wales Supreme Court on 14 March 2002 in ASIC v Adler & 4 Ors [2002] NSWSC 171.
The breaches committed by the three directors clearly breaches of corporate governance in the context of discipline, accountability and
THE IDENTIFIED CORPORATE GOVERNANCE BREACHES
Based on the study and analysis of the case, it is discovered that the breaches including but not limited to the following have occurred in HIH case:-
5.1 breaches of directorial duties, or duties as an officer
Three directors namely Rodney Stephen Adler, Raymond Reginald Williams and Dominic Fodera have committed breaches of those statutory duties as director or officer by reason of their respective involvements in a payment of $10 million by HIHC to a company of which Rodney Stephen Adler was a director. There was no approval or ratification obtained to these transactions from investment committee or board.
They have therefore acted in contravention of Section 180 (lack of care and diligence), Section 181 (lack of good faith and proper purpose), Section 182 (improper use of position) and Section 183 (improper use of information) of the Corporation Act. They were found guilty of criminal charges under the Corporation Law by the New South Wales Supreme Court on 14 March 2002 in ASIC v Adler & 4 Ors [2002] NSWSC 171.
The breaches committed by the three directors clearly breaches of corporate governance in the context of discipline, accountability and