International Law

Disqualification of foreign banned company directors

Senator Nick Sherry, Minister for Superannuation and Corporate Law, has introduced into the Parliament the Corporations Amendment (No 1) Bill 2008 which will ensure that individuals who are disqualified from managing companies by a court in foreign countries will also be automatically disqualified in Australia.

The legislation will in the first instance operate only in relation to banned company directors from New Zealand, although other jurisdictions may be added in the future.

In addition, where disqualification of a director has occurred by automatic operation of the law in a persons' home jurisdiction, as opposed to by a court, there will now be legal grounds for the Australian Securities and Investment Commission (ASIC) to apply to an Australian court for an order that that person also be disqualified in Australia. ASIC will also be required to record the name of any person that has had a court order made against them under the proposed section on its disqualified persons register and ensure a copy of that court order is retained on the register.

The Bill also states that a corporation cannot indemnify a director for the legal costs of an unsuccessfully defended action brought by ASIC under the new law.

Full post as published by Australian Regulatory Compliance Review on December 09, 2008 (boomark / email).