Australian regulator ASIC has informed the public that it has commenced civil penalty proceedings in the Federal Court of Australia against Frank Cullity Wilson, former managing director of Quintis Limited (Quintis), for failing to discharge his duties as a director under section 180 of the Corporations Act 2001 (Cth).
ASIC is alleging that by failing to disclose to the Quintis Board of directors that key contracts with Nestle-owned Galderma (Galderma agreements) had been terminated, Mr Wilson did not discharge his duties to Quintis with the degree of care and diligence that a reasonable person in the position of managing director would exercise.
ASIC alleges that Mr Wilson was aware that the Galderma agreements had been terminated in early 2017 but the Quintis board of directors did not become aware until 9 May 2017.
ASIC further alleges that when Quintis responded to an ASX query on 27 March 2017, Mr Wilson allowed Quintis to release information regarding the status of the Galderma agreements that was misleading or deceptive.
ASIC is seeking against Mr Wilson declarations of contravention, civil penalty orders and an order prohibiting Mr Wilson from managing corporations for such period as the Court thinks fit. Quintis, the company, is not a defendant to the proceedings.
The matter has been listed for a further hearing on 28 June 2018.
ASIC’s investigation is ongoing.
On 10 May 2017, Quintis released an announcement to the Australian Securities Exchange disclosing that the Galderma agreements had been terminated and that the termination had taken effect on 1 January 2017.
The announcement stated that the directors of Quintis had been advised of the termination on 9 May 2017, and were previously unaware. The Quintis share price dropped 43.93% on opening for trading after the announcement was released.
Quintis shares were voluntarily suspended from official quotation on 15 May 2017 and have not traded since.
On 20 January 2018, Quintis was placed into voluntary administration, with Messrs Richard Tucker, Scott Langdon and John Bumback of KordaMentha being appointed. On 23 January 2018, Mr Robert Brauer of McGrathNicol was appointed as receiver and manager of the assets and undertaking of Quintis.