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What could have been done by ASIC

ASIC is in progress with a wide number of legal proceedings that have been located against different companies that are within the Westpoint Group. These are some of the proceedings that had been launched as from early mid 2004 to the current and most recent scenarios. These are proceedings that take into considerations a wide number of aspects that includes cases of failure exhibited by different companies within the overall group of Westpoint when it came to offering of investors’ investments, which by all legal means had been regulated under the Corporations Act 2001. The failure had also been directed towards an aspect of being inappropriate when it came to lodging of financial accounts by many companies, and this was particularly for the financial year that had ended 30 June 2005 (Goran, 2004).

To understand the need what ASIC could have done when it comes to the existence of the promissory notes schemes in relation to WestPoint Corporation, there are provisions within the Corporations Act especially when it comes to companies’ schemes. There is a provision in section 601ED of the Corporations Act gives a limitation to the ways operating a managed investment scheme, especially in such stated jurisdiction, that may not be registered, and it is by legal standing that the scheme must be registered. In this case, a person operating a managed investment scheme without observing the stated legal provisions about such schemes is bound to face various laid down legal proceedings (Steven & Lazar, 2008).

The court and ASIC are in legal position to carry out orders in relation with the act of winding up all investment schemes found to be breaching the stated provisions. Since the scheme was a managed investment scheme and had not been registered as stated by the provisions of the Corporations Act, ASIC was supposed to establish this fact of being illegal, and not necessarily determining the final action of insolvency of the Westpoint operations despite all the protestations that had been issued by ASIC to the different position. With such position, it gives no doubt that ASIC was determined to bring to an end the promissory note schemes of Westpoint, especially with the application provided under the Corporations Act when it comes to winding such schemes on the basis of being unregistered. Breaking of the law is supposed to be directed towards individuals who are managing and controlling such schemes, especially when they unregistered and are required by law to be registered.

Reasons for Regulating Corporations

Regulation of corporations is a legal procedure aimed at protecting the overall interests of the identified investors within the selected business setup (Steven & Lazar, 2008). Considering the case of Westpoint Group, the ASIC actions towards various companies within the group was a concern towards the York Street project in that at the specific time it was insolvent and that a large number of investors, almost 900 in number were considered to be at severe risk of experiencing a lose of about $75 million of the financial investment. Therefore, ASIC acted within the procedures of protecting the financial interests of the investors. In the same relation, ASIC was concerned about the idea of asking the companies’ investors to rollover all investments and change them into other adjacent Westpoint companies, and this was being conducting without sufficient admission and discovery of various risks associated with such decision.

Regulating of corporations is also aimed at preventing various upcoming companies from providing wrong information to relevant stakeholders and other concerned individuals. In this case, ASIC showed an ending concern towards this treaty as York Street was at huge stake of providing deceptive and misleading information and other relevant material to its promissory notes holders (Goran, 2004). This was evidence that has been placed before the court pointing out that Westpoint Management Ltd, as a corporation, was deliberately implicated in the whole process of misleading and misinforming behavior by York Street.

Regulating corporations also many companies to observe, manage, evaluate, and control various projects that have been initiated and are running. This ensures that every operation within an identified company normally runs within the stated legal frameworks and procedures, so that the projected outcomes are effectively and efficiently realized. The concern of ASIC towards Ann Street Mezzanine Pty Ltd was in relation with the Ann Street project, which was considered to be to have gone insolvency despite the fact that within a period of seven years (between September 2002 and September 2005) the company had been in a position to raise $72 million from investors, which was a large sum of money. In such kind of revelation, it is clearly indicated that the company had made diminutive advancement when it came to construction work that had been designed for the project (Parker, 2005).

Another reason as to why corporations are legally regulated is for the purpose of ensuring that all the assets of the companies affected are conserved for the known advantage of the companies’ existing investors. Providing important information about the company will also helps other new investors to avoid investing money in various projects that are considered to be insolvent.

Regulations to be made

The following regulations can be made in relation to the provided legal framework and procedures. There should be a clear corporate governance achievement level, and this is a way of determining a continued increase in the company’s corporate governance necessities in line with the growth and development of the company. This creates a clear platform of enabling the company to develop significant performance indicators that plays a critical role in measuring effectiveness of the company’s corporate governance.

Another regulation that can be made is the creation of corporate governance within the planning stand. This enables companies to develop knowledge centers within their business operational structures that are in line with the identified planning procedures, provision of relevant information, and evaluating and controlling areas of proficiency.


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