Australian Securities and Investments Commission v Citrofresh International Ltd (No 2)

This proceeding was brought by the Australian Securities and Investments Commission ("ASIC") against Citrofresh International Ltd ("CIL") and Ravi Amrit Narain, the latter being the Managing Director and Chief Executive Officer of CIL. ASIC alleged that CIL had made misleading and deceptive statements in relation to its product Citrofresh. ASIC further alleged that Mr Narain had caused CIL to contravene the misleading and deceptive conduct provisions of the Corporations Act 2001 (Cth) ("the Act") and that he had contravened the Act by reason of his participation in the drafting and preparation of the letter in the manner alleged, his approval of the contents of the letter, his direction to CIL's company secretary to send the letter to the Stock Exchange and the fact that both letters contained his name as one of two persons to contact for further enquiries. CIL consented to orders being made against it and the proceeding continued against Mr Narain who denied the allegations made against him. On 3 July 2008 the Full Court allowed the appeal, set aside the orders I had made and remitted the matter to me for further hearing. In this case, I found that the five statements relied upon by ASIC were misleading and deceptive. I also found that Mr Narain had contravened s 1041H(1) and s 180(1) of the Act. I am satisfied that Mr Narain contravened s 1041H(1) of the Act personally and that he caused CIL to contravene that section. I also found that Mr Narain's conduct contravened s 180(1) of the Act. There remains for further consideration ASIC's application for orders that pursuant to s 1317G of the Act, Mr Narain pay a pecuniary penalty in respect of the contravention of s 1041H(1) and that pursuant to s 206C(1) of the Act Mr Narain be disqualified from managing corporations for a period that the Court considers appropriate.