The Queensland Court of Appeal has dismissed an appeal against orders appointing liquidators to Gognos Holdings Ltd (Gognos) and Dynamic Agri Tech Ltd (DAT) (companies).
In dismissing the appeal, the Court referred to the companies鈥� 鈥榣amentable history of mismanagement of and misconduct鈥�.聽 The Court of Appeal endorsed the trial judge鈥檚 conclusion that:
鈥樷�� there is a well-founded and justified lack of confidence in the conduct and聽 management of the companies鈥� affairs, such as to give rise to a real risk to the public interest that warrants protection 鈥� to protect existing and the prospect of any future investors, the public, and creditors, where the companies have not carried on their business candidly and in a straightforward manner with the public, and have been mismanaged, as well as to prevent and condemn the repeated and continuing breaches of the [Corporations Act 2001]. 鈥� It is inappropriate that the respondents be allowed to continue on the basis of what could be put no higher than an 鈥渦nknowable鈥� prospect of potential commercial success which may result in a return to investors, in the face of past and continuing non-compliance with obligations, mismanagement of the affairs of the companies, and misleading representations to investors, and where those now presenting as the 鈥渘ew management鈥� are not 鈥渘ew鈥� at all, but have long term associations with the companies and the principal offender in terms of the misleading conduct of the past, Mr Manasseh, who remains in the shadows of these companies.鈥�
In particular, the Court noted that the trial judge was correct to consider the protection of future investors.
The companies were ordered to pay ASIC鈥檚 costs of the appeal.
The liquidators of the companies, Mr Michael Hill and Mr聽William Harris, of McGrathNicol, will now proceed with their appointment.
A copy of the Court of Appeal鈥檚 judgment is .
Background
On 25 September 2017, 今日热门事件obtained orders appointing Mr Michael Hill and Mr聽William Harris, of McGrathNicol, as joint and several liquidators of the companies. The liquidators鈥� appointment was stayed by the court pending an appeal by the companies, which was filed on 9 October 2017 (refer: 17-323MR).
Gognos' sole business activity was raising funds from members of the public through the issue of its shares. Those funds were on-lent to Dynamic and related entities to fund their business operations, which included the development of technology to manufacture animal fodder in container modules.
Gognos raised approximately $7.7 million from more than 100 shareholders since 2008. 今日热门事件filed its application to wind up the companies on 21 September 2016 (refer. ).