Friday 9 February 2007 LAWFUEL – Australia Law News – A Queensland man was today jailed for dishonestly using his position as a director of a listed Sydney-based company. Mr James Kwok, of Hope Island, Queensland, was sentenced to 24 months imprisonment to serve 14 months by way of periodic detention following an investigation by the Australian Securities and Investments Commission (ASIC). Mr Kwok was sentenced in the Sydney District Court today after being found guilty, following a two-week trial in October 2006, of dishonestly using his position as a director under the Corporations Act.
ASIC alleged that Mr Kwok acted dishonestly while a director of Envirostar Energy Limited (Envirostar), a publicly listed company, by not disclosing his interest in two parcels of land leased by Envirostar. The leases over the land commenced in mid-2000 but Mr Kwok’s interest was not discovered until August 2002 when he tendered his resignation from the Envirostar Board. Envirostar had paid rent of approximately $30,000 per month for the land. ASIC also alleged that Mr Kwok’s wife and son were directors of the companies, recorded as owners of the land, and that Mr Kwok failed to disclose this interest to the Envirostar Board or to Envirostar’s shareholders, either prior to or during the term of each lease. Envirostar’s principal activity was building power plants to convert waste material into energy.
ASIC’s Executive Director of Enforcement, Jan Redfern said today’s outcome was a reminder of the important and ongoing responsibilities that company directors carry, and the consequences directors face by defying their legal obligations. ‘The sentencing of Mr Kwok is a timely reminder that company directors will face significant consequences of dishonestly using a position of trust. ASIC is committed to strengthening the corporate landscape and will continue to pursue those that undermine its integrity’, Ms Redfern said. The Commonwealth Director of Public Prosecutions prosecuted the matter. For further information contact: Jan Redfern Executive Director, Enforcement Telephone: 02 9911 2191 Mobile: 0411 119 210 Danielle Huck ASIC Media Unit Telephone: 03 9280 3407 Mobile: 0417 540 769