The corporate watchdog has announced it will appeal the NSW Supreme Court’s decision to dismiss its case against former One.Tel executives Jodee Rich and Mark Silbermann.
The Australian Securities and Investments Commission has been pursuing legal action against the pair since One.Tel’s collapse in 2001, alleging Rich and Silbermann have failed to properly divulge the company’s financial position to the board.
Justice Robert Austin said in his ruling last month that ASIC has failed to prove its case, and in regard to its arguments stated “time and again they were shown to be unpersuasive when the underlying financial details were investigated”.
He said there was a lack of evidence to support ASIC’s arguments, and were there were documents support by witnesses the “plausible explanations” of Rich and Silbermann were preferred.
But ASIC has now said it will appeal the decision. The regulator is seeking financial penalties from both men, and disqualifications from acting as directors.
“In 2001, ASIC commenced civil proceedings against Mr Rich and Mr Silbermann in relation the company’s collapse in 2001 and sought rulings from the court on the duties and obligations of officers to disclose a company’s financial position to the board and the market.”
“ASIC has until 27 February 2010 to commence an appeal of the NSW Supreme Court decision.”
The case has been in front of the court for eight years. It has taken 232 sitting days, with 37 witnesses giving oral evidence.
ASIC previously sought $92 million in compensation, but after last month’s ruling it was ordered to reimburse Rich and Silbermann for legal costs.
The regulator itself is reported to have incurred legal costs of about $20 million.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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