Insolvent trading is the law under the Corporations Act section 588G that says that if a company is insolvent and a director allows the company to incur a new debt, then the director can be personally liable for the new debts incurred. The law makes directors responsible for ensuring that their company does not trade while insolvent. This is in addition to their general duties to act with care and diligence, in good faith, in the best interests of the company and not to improperly use their position or information received for personal gain.
This page is contains general information about Insolvent Trading in Australia.""
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Yet again we are not trading as we are in suspension but I am not 100% sure that this is right either. Someone with more knowledge could explain it further although I am of the beliefs that while the company is in operation they are still trading (although their shares are not trading in the sharemarket), and realising either profits or losses while doing it let alone increasing the debts, if any.
Don't forget this part................................Corporations Act section 588G that says that if a company is insolvent and a director allows the company to incur a new debt, then the director can be personally liable for the new debts incurred.
IMHO, that part says it all and explain it to us properly.
While also IMHO, that could be the reason that some of the Directors are jumping ship before the real questions will come in for a proper answer. Directors of ASX listed companies don't leave their cushy and highly paid jobs for nothing and if they aren't at all concerned at what could happen to their future careers.
CDU Price at posting:
23.5¢ Sentiment: None Disclosure: Held
