Australian Securities and Investments Commission v Guo (No 2)

The Australian Securities and Investments Commission (ASIC) sought to maintain travel restriction orders against Mr Allan Guo, a Chinese citizen and permanent resident of Australia, in relation to an investigation into potential breaches of director's duties and other alleged contraventions by Mr Guo in his role associated with Blockchain Global, the operator of the ACX Exchange. The matter was heard in the Federal Court of Australia, where Mr Guo applied to discharge the travel restriction orders imposed by Justice Button on 20 February 2024. The orders were made under section 1323 of the Corporations Act 2001 (Cth) to prevent Mr Guo from leaving Australia during the course of the ASIC investigation.

The primary legal issue the court had to decide was whether ASIC had demonstrated that the travel restriction orders were necessary or desirable for the purpose of protecting the interests of those to whom Mr Guo may be liable. ASIC argued that the continued presence of Mr Guo in Australia was essential for the investigation to proceed effectively, given his central role in the affairs of Blockchain Global and the ACX Exchange. Conversely, Mr Guo's legal representative contended that ASIC had not established the requisite jurisdictional basis for the orders, as the investigation was primarily aimed at compiling evidence for a potential criminal prosecution rather than recovering financial liabilities.

The court considered the test established in Australian Securities and Investments Commission v ActiveSuper Pty Ltd (No 4), which requires a balancing exercise weighing the benefit and detriment to the defendant against those of the aggrieved persons. Factors such as the importance of protecting investors’ interests, the risk of the respondent leaving the jurisdiction, and the respondent’s legitimate travel interests were taken into account. The court found that given the nature of the allegations and the early stage of the investigation, Mr Guo's continued presence in Australia was necessary to facilitate the investigation and potentially enhance the chances of aggrieved persons recovering monies. The application to discharge the travel restriction orders was dismissed.

The court's final orders were that the defendant’s application to discharge orders 4, 5, 6, 7, and 8 of the orders made by Button J on 20 February 2024 be dismissed. The entry of these orders is governed by Rule 39.32 of the Federal Court Rules 2011.