Page 1 of 2 Assessment Brief Assessment 2: Case Study Assessment Background Assessment Type: Online Submission Word Limit: 1500 words Due date: 5:00pm Thursday, 23 September 2021 (AEST) Weighting: 40%...

THIS IS A COMPANY LAW UNIT
please make sure to answer base on rubrics. Need a professional to look into this.


Page 1 of 2 Assessment Brief Assessment 2: Case Study Assessment Background Assessment Type: Online Submission Word Limit: 1500 words Due date: 5:00pm Thursday, 23 September 2021 (AEST) Weighting: 40% Task You are a graduate analyst in the Corporations and Corporate Governance Division of the Australian Securities and Investments Commission (ASIC). See attached memorandum from your team manager, along with a letter, and company search extract. You are asked to respond in a memorandum of advice. See here for advice on the structure: https://emedia.rmit.edu.au/learninglab/content/writing-legal-memo. Your submission is to be made on the Assignment Two page on Canvas. Referencing guidelines This is an independent assessment task. You must submit your own work and you are not permitted to discuss the assessment with any other person. You must acknowledge all the sources of information you have used in your assessments. Academic misconduct will be taken seriously. Compliance with a specific citation style is not required. Harvard style (author, date) or Oxford Style (footnotes) can be used – but should be consistent throughout the document. A full bibliography is not required. Refer to the RMIT Easy Cite referencing tool to see examples and tips on how to reference in the appropriated style. You can also refer to the library referencing page for more tools. https://emedia.rmit.edu.au/learninglab/content/writing-legal-memo http://www.lib.rmit.edu.au/easy-cite/ https://www.rmit.edu.au/library/study/referencing Page 2 of 2 Grading Rubric Internal Memorandum – Not for Distribution Memorandum Confidential KG Training Enterprises Ltd – Governance Issues We have just received a letter from Barry Yang on behalf of his client Regional Greyhound and Harness Racing Ltd. The letter raises several allegations against KG Training Enterprises Ltd. I am tasking you with reviewing the enclosed letter and the company search providing me with a memorandum containing your written analysis in response to the question that I have raised. Please keep your analysis to a maximum of 1,500 words. Please submit this for my review no later than 5:00pm Thursday 23 September 2021, so that I have sufficient time to consider your analysis on this matter prior to a meeting with the Executive Director of our division on Friday. Note that I am at a conference for the next two days and will not be contactable. If you have any questions or need further information to complete your analysis, please just include this in your memorandum and we can obtain further instructions. Thanks in advance. Kind regards, From To Michelle Moorehouse Manager Corporations and Corporate Governance Division Date Monday 20 September 2021 Graduate Analyst Internal Memorandum – Not for Distribution REQUIRED QUESTIONS: 1. Review the company search extract for KG Training Enterprises Ltd (KGTE) and explain any deficiencies with reference to the requirements for appointment of directors and other officers under the Corporations Act. 5 marks 2. Review the letter from Barry Yang. a. Is Barry correct in that Alex’s previous conviction for theft will prevent him from ever being appointed a director of KGTE? What about if he is charged with serious animal cruelty? 5 marks b. Alex has not been formally appointed a director of KGTE. Do director’s or officer’s duties apply to Alex? 5 marks c. Assume the facts outlined in the letter are true. Will Kevin, Gemma, or Holly have breached their duties as directors of KGTE? 20 marks d. Explain the penalties that ASIC could impose against the directors in the event of a breach of their duties as a director compared to the penalties ASIC could ask the Federal Court of Australia to impose. 5 marks Note: For all questions, explain your analysis with reference to the Corporations Act and any other applicable case law. Limit your analysis to consider only statutory duties. Page 1 of 3 REGIONAL INSOLVENCY ADVISORY LLP 17 September 2021 Corporations and Corporate Governance Division Office of Enforcement Australian Securities and Investments Commission GPO Box 9827 Brisbane QLD 4001 By email: Dear Officer KG Training Enterprises Ltd (ACN 121 725 330) We act for Regional Greyhound and Harness Racing Ltd – a public company that is the body that regulates Greyhound and Harness Racing in Regional Victoria. It has an interest in maintaining a financially viable racing industry to support 10,000 jobs across the state. Our client has recently become aware of the activities of KG Training Enterprises Ltd (KGTE). We are instructed to make a referral to ASIC for an investigation to ascertain whether the directors of KGTE have breached their duties as company directors. 1. Background KGTE is an Australian company registered in 2003 under the Corporations Act 2001 (Cth). It has operated a kennel for training greyhounds and – more recently – a stable for training horses for harness racing. The kennel and stables are based at a large facility in Elliminyt in Southwest Victoria located in close distance to a country racecourse. KGTE is not a “household name” like trainers in the thoroughbred industry, but over the years it has maintained an excellent winning strike rate and a profitable enterprise. It has more than 20 staff (full-time equivalent). 2. Directors KGTE is essentially a family business. • Gemma Chapman is the Managing Director. Gemma oversees the marketing, finances, and other general day-to-day administrative activities of the company. She holds an MBA from RMIT’s Graduate School of Business and Law. • John Chapman, Gemma’s husband, is also a director. John turned 60 in 2019 and retired from full-time work in the company. Greyhounds are his passion – so while he does not take an active role in the management of the company, he regularly walks the kennels and talks to the employees and asks how the dogs are preparing for upcoming race meetings. • Holly Chapman is the daughter of John and Gemma. She was recently appointed a director, replacing her elder brother – Kyle – who quit and left the country to pursue a career in competitive cross-country skiing. Her passion is horses and is currently one year into her jockey apprenticeship (Cert IV – Racing Harness Driver). Page 2 of 3 • Alex Silver is the head trainer and oversees both the staffing of the company and the greyhound and the harness racing operations. He is an experienced trainer – with formal qualifications and a decade of industry experience. He is Gemma’s nephew and Holly’s elder cousin. Although he technically reports to Gemma, most of the employees and contractors call him “boss” whereas they consider Gemma to be the business owner. In March 2015 he was convicted for theft (a dishonesty offence punishable by up to 10 years imprisonment) and received a fine of $10,000. He blamed his offending on a personal crisis that he has since received counselling and treatment about – and Gemma appears to have no issues with trusting Alex, although he doesn’t have direct control over the company’s finances. Nevertheless, our clients considers that his conviction should disqualify Alex from ever being a director of KGTE. 3. Shareholding The Chapman family have the largest interest in KGTE – holding 45% of the shares through Chapman Pty Ltd as trustee for the Chapman Family Trust. The remainder of the shares are owned by various private and commercial investors. Under the company’s constitution the Chapman family are entitled to at least two director’s positions. 4. Concerning activities 4.1 Company Finances Recent balance sheets show that the company owns over $10 million in assets – but this is mainly in land and capital equipment. It is well known around town that KGTE does not pay its bills. KGTE owes our client $150,000 in unpaid registration fees and in June 2021 our client issued a formal demand for payment. In July 2021, food suppliers and local veterinarians informed other suppliers that they would only be supplying to KGTE on a “cash on delivery” basis until KGTE made adequate payments on its accounts. In August 2021, two of KGTE’s former employees made an official complaint to the Victorian Wage Inspectorate for not paying their leave and superannuation entitlements. In an email to shareholders in September 2021, KGTE announced that it had spent $250,000 on building an owner’s bar and lounge at KGTE’s property – in the hope that this would increase revenue in the longer term. Our client is frustrated that KGTE are continuing to trade. There have been no formal meetings of the board since John retired. Alex and Gemma have a weekly management meeting and Gemma is accustomed to following his advice about all things related to the operation of the business. Gemma directly manages the finances and receives financial reports from the company’s accountant each quarter. Email records show that sometimes she forwards these to the other directors, sometimes she doesn’t – but they don’t ask for the information or ask any questions. 4.2 Animal Cruelty In March 2021, Alex as head trainer was investigated for serious animal cruelty under the Prevention of Cruelty to Animals Act 1986 (Vic) (an offence punishable by up to 2 years imprisonment). It is alleged that KGTE used rabbits as “live bait” in the training of greyhounds and used battery-powered shock devices in the training of horses at two separate properties owned and operated by KGTE. Our client investigated KGTE after being supplied video footage by an activist and documentary filmmaker – who secretly entered KGTE’s property and set up video surveillance. No charges have been laid and the investigation is ongoing. There is no suggestion that the other directors had any knowledge or involvement. Page 3 of 3 4.3 Issue of Shares Our client has been informed that there are a group of KGTE’s shareholders that are unhappy about the management of the company following the revelations of animal cruelty. In early July 2021, the group of shareholders advise the directors by email that they will be seeking to replace the directors at the Annual General Meeting later this