$5 million in damages after losing a major court battle with former mine manager Carna Group. Subsequently, in mid-November, the Australian Securities and Investments Commission (ASIC) charged Griffin under the Corporations Act, for failing to lodge audited financial accounts for the 2019 and 2020 fiscal years.
The Commission now appears to be widening its legal case against the company over an alleged failure to have a resident local director. According to flings lodged with the regulator, Raj Kumar Roy, a resident of Ghaziabad, in the province of Uttar Pradesh in India, is the sole director of Griffin confirms the company’s non-compliance with the resident director provisions.
According to experts, the regulations are in place to ensure companies operating in Australia remain accountable for their actions. Cinzia Donald, a partner at Perth-based law firm Lavan, noted that they were designed to ensure “a creditor or an investor can bring proceedings and hold (directors) to account where they’ve breached certain obligations” in the Pacific nation. She is of the view that these failures may cause the ASIC to take “incredibly dramatic” action against Griffin, as it has done in the past against those who had committed similar breaches.
“ASIC has in the past applied to wind up companies or at least applied for a provisional liquidator to be put in control of a company where they’ve investigated and found multiple contraventions of the Act,” Donald noted. “There are cases that have relied on this very provision, where they’ve failed to have a (director) residing in Australia. Often that coupled with other concerning contraventions such as a failure to lodge audited accounts… ASIC certainly has taken serious measures.”
The litigation specialist added that the failure to appoint a resident director is not overly serious on its own, with the potential of a maximum penalty of about $4000. However, she pointed out that this may not be the case of Griffin, particularly given the breaches of the law committed by the company.
