Sion Australia Oil And Gas Limited (In lid) (Sion) is an Australia based organization, which is a part of China based organization, named as Haying. In the year 2013, this organization signed a public prospectus to make an offering. SAX signed an assignment with Sion, and that time managing head and executive director of the SAX was Mr. Tamping Shoo. That time the organization made an announcement that, it had raised $12,829,318 from the IPO. Mr. Shah asked the Sion headquarter to transfer $7 million to the headquarter of Sion in China. Mr. Shah gave authorization to it, but the directors of Sion of the Australia Beach didn’t have any clue about the transaction. Mr Johnson and Mr Faulkner was the chief executive of the Australia branch of Sion, and they did not have any idea about the transfer of the money. Mr Johnson and Mr Faulkner approached SIC about the wrong transaction, and they expressed their concern about the governance procedure in the Sion. Later they approached the federal court as well to solve the issue. The federal court ordered that, there will be a new liquidator in the organization which was appointed on 2016. SIC applied for declarations of contravention of the Corporations Act 2001 (Cathay) (Act) against Sion and Mr Shoo.
SIC claimed that, Sion has violated multiple rules and regulations and it has adopted unethical ways to raise funds. SIC also brought allegations against Sion that they have made false claims and they have written false promises on the public prospect. The organization also claimed that, Sion has mentioned about fake patents in their prospect. AS Chad also claimed that, Sion has mentioned false revenue and provided fake documents to raise funds. The federal court judge found that all these allegations were true and Sion has violated multiple rules. SIC has also claimed that, the director of Sion Mr. Shah has failed to conduct his duty in a proper manner. Mr. Shah claimed that he dint breach any law or duty. Though, the federal court judge commented that whatever was written in the public prospectus was false and Mr. Shah has failed to serve properly as a director of an organization. According to the rule of law, Mr. Shah has violated multiple rules and regulations. According to the Australian law declaring the annual report properly is the responsibility of the director of the organization. It is very important for all the organization to state about their financial statement. Mr. Shah has failed to perform his duties and discharge his responsibilities in a safe and secure manner. According the rule of Australia, this is a serious crime and the organizations SIC brought some serious allegations against Mr. Shoo.
The federal court ruled that, Sion had violated multiple corporation acts. Mr. Shah didn’t state the financial statement properly and he has also tried to mobilize a lot of money from the other organization unethically. As per the Australian corporation law, Sino has violated sections 674(2), 728(1) (a), 728(1) (b), 728(1) (c), 104TH of the corporation act of Australia.
The corporation act was brought in Australia in 2001. These laws were made by the legislators to deal with the business entities. Previously the organization of Australia had to visit the federal courts to solve their issues . After the enrollment of this act, private enterprises can visit the court and the court will be able to resolve the issues in a less time period. According to the 2001 corporation act the director of Sion has violated multiple rules. And the federal judge found that Mr. Shah intentionally did that to unethically raise fund for his organization. Some lawyers claim that, Mr. Shah has also violated the sis 180, 181 and 182 sections of the corporation act. According to Breton, if it can be proved that Mr. Shah has violated the 180 (1) of the corporation act 2001, then it will lead some other consequences. According to the 180(1) of the corporation actor of 2001, this explains that there the breach of law has caused harm to the interest and social image of the victim organization. In this case, the action didn’t cause any harm to the victim organization .
As the federal court dint found anything, which can harm the interest of the victim organization that is why the court ordered that Sion organization will pay some basic penalties. In this case provisional liquidation took place, and that is why the federal judge ordered to impose some civil penalties on the Sion organization.
The Australian Securities And Investment Organization filed a case against the Sion Australian Oil And Gas organization has provided fake details about its drilling project in it public prospectus. The SIC has also claimed that, Sion has tried to unethically mobilize money from other organization to raise its fund. The federal court ruled that, Sion has violated multiple rules and regulations of the Corporation act 2001. The SIC organization filed a report that, Sion has provided fake information about its drilling technology in its prospectus. Because of the wrong data, SIC have analyzed that the organization will never be able to meet the profit forecast. SIC has also seen that, the director of Sion group Mr. Shah has failed to deliver proper financial statement and profit forecast. Mr. Shah tried to mobilize $7 million fund from the SIC group by providing false profit forecast and wrong data about the drilling technology. That is why; SIC fielded a complaint against the Sion group in the Australian Federal court.
After a detailed investigation, the judge found that Sion group has actually breached the law. The Sion group intentionally manipulated the data in their public prospectus in order to gain profit. The organization provided wrong data about their drilling technology, which was intentionally done by the director of Sion group. The court also noticed that, Mr. Shah has intentionally provided wrong data about their drilling technology.
Providing wrong data is actually a punishable offence according to the Corporation act 2001. The Sion group also failed to translates all the prospectus documents to the SIC organization. Which means that the organization intentionally violated the rules of the Corporation act of 2001? Some scholars say that, if the organization breached the rules of corporation act 2001, then the judge may consider this as a case of contradiction of section 180(1) of the corporation act. Some critiques argue to that, and they said that to consider the case of violating section 180 (1) of the corporation law, the organization has to cause harm to the interest of the victim organization but in this case no organization was affected.
Also some scholars say that, this case might be a matter of misconception and the director of the Sion group of industries may not be completely responsible for the breach of law. Finally scholars have added that, no organization was affected by this incident, and that is why some basic civic penalty was the best possible decision in this case . The judge of the federal court ruled that, the Sion group director has to pay for civil penalties.
Most of the critiques comment that, this is a serious violation of the Corporation act 2001. The Sion group has intentionally provided the wrong inform motion about their drilling technology to raise fund for their organization. The director of the Sion group also failed to disclose the matter inform of the board. That means the director if Sion group of industries have intentionally manipulated the data to mobilize the fund. It is the responsibilities of the director to check and ensure genuine data is presented in the public prospectus of the organization. If anything is presented in the public prospectus of an organization is wrong, or the authorities of the organization fail to explain it then it will be considered as the breach of law.
The incident contradicted some major rules and regulations of the corporation act, 2001. The organization provided wrong data about their drilling technologies. And the director was asked to provide a translation copy of the drilling technology data. The director of the Sion group failed to provide the translation of their public prospectus, which was the breach of section 674(2), 728(1) (a) of the Corporation act 2001. The director of the Sion group also tried to mobilize a fund from the SIC group, which was also a violation of the Corporation act.
The director failed to provide the financial statement of their organization. Sion group claimed that their product will help the SIC organization to achieve certain goals. But after the detailed analysis of the drilling technology, the organization found out that the technology will near be able to provide them the promised result . Which is again a violation of the section 728(1) (c), 104TH