Babcock & Brown directors may have breached their duties and corporations law by operating whilst insolvent, reports The Australian.
An explosive new report from the company’s administrators, obtained by The Australian, found the investment bank may have been insolvent three months before it was placed into administration.
The administrators’ report, which will be made available to investors on August 17 claims that Babcock & Brown “became insolvent at the latest on or about 29 November 2008,” but the company was not placed into administration until 13 March.
The report adds: “Accordingly, the BBL Board should have acted at this stage to suspend trading in BBL listed securities; to make an announcement to the market regarding BBL’s solvency and the implications…[and] to place BBL into voluntary administration.”
According to The Australian, other claims contained in the report include conflict of interest, inadequate disclosure to investors, key risk management weakness, and possibly misleading statements in investment documents, amongst other things.
The report recommends the company be placed into liquidation.
