LAWFUEL – Press Release Service – Sydney company director Mr Gaby Haddad was yesterday banned from managing corporations for eight-and-a-half years in the Federal Court of Australia, as a result of action by the Australian Securities and Investments Commission (ASIC). The Court also: • made declarations that Mr Haddad and his company Liban Net Pty Limited (Liban Net) had contravened provisions of the Corporations Act and ASIC Act • ordered permanent injunctions restraining them from selling or offering to sell insurance products • found that Mr Haddad had embarked upon a deliberate course of conduct, and that the only conclusion was that he set out to mislead as to the nature and extent of the ‘insurance’ he sold, and • ordered that Mr Haddad and Liban Net pay ASIC’s costs.
‘ASIC acted against Mr Haddad and Liban Net to prevent worthless car insurance being sold to unsuspecting members of the public’, said Mr Allen Turton, ASIC’s Deputy Executive Director of Enforcement. ‘The court described his conduct as plainly dishonest, and said that members of the public had been indiscriminately placed at risk by his behaviour. ‘The eight-and-a-half year ban that the court imposed on Mr Haddad should serve as a strong reminder to company directors about the importance of maintaining proper standards of behaviour’, he said. From January 2004 to July 2005, Liban Net issued worthless insurance cover notes for 301 vehicles, with premiums totalling $348, 765.61.
Liban Net used the names ‘API’ and ‘Australian Private Insurance’ to carry on a motor vehicle insurance business without a licence and when not registered.
Liban Net also made representations that well-known insurers were the underwriters, which was false. ‘Australian Private Insurance’ and ‘API’ should not be confused with ‘API Insurance Services’, a business wholly owned by the Australian Post-Tel Institute (SA & NT) Incorporated.
Background On 29 June 2005, in the Federal Court of Australia, Justice Peter Hely granted ASIC interim orders restraining Mr Haddad and Liban Net from selling or offering to sell insurance products. On that same date, ASIC commenced a civil action in the Federal Court of Australia
against Mr Haddad and Liban Net for declarations of contravention, permanent injunctions, an order disqualifying Mr Haddad from managing corporations, and costs.
ASIC took that action as a result of concerns that Liban Net had sold worthless motor vehicle insurance policies to members of the public, and that representations to the effect that its policies were underwritten by a well-known insurance company were false.
Any person who has suffered loss or damage as a result the contraventions may be able rely on the declarations in seeking to recover the amount of their loss or damage from Mr Haddad or Liban Net Pty Limited. For further background, refer to ASIC media releases 05-195, 05-213 and 05-287. For further information contact: Allen Turton Deputy Executive Director, Enforcement Telephone: 03 9911 2338 Mobile: 0411 549 236 Kate Harvey ASIC Media Unit Telephone: 03 9280 3553 Mobile: 0401 985 966List your legal jobs on the LawFuel Network