Material Personal Interest – Director’s Duty to Disclose

In Victoria, Material Personal Interest – Director’s Duty to Disclose is found in section 191 of the Corporations Act 2001. It is a criminal offence that is committed by a Director of a company who failed to notify other Directors of a material personal conflict of interest with the company.

Have you been accused of Material Personal Interest – Director’s Duty to Disclose? If so, you should contact our firm to have a confidential conference about your matter with one of our experienced criminal defence lawyers.
 
Interview
Have you been asked to attend a interview? Do you know how you intend to respond to investigator’s questions? It is important you are informed about the procedure. Investigators will already have obtained information, and evidence, such as witness statements and other material, that will relate to the allegation. They have likely already decided to charge you with the offence. The purpose of an interview is to obtain admissions that will further support a case against you.

We recommend you contact our office to arrange a conference so that we may inform you as to interview procedure, and develop a strategy that will assist you in considering whether to attend a interview, and answer questions. We also regularly attend interviews with people, ensuring they feel comfortable exercising their rights in what is often a formal and unfamiliar environment while also ensuring Police are held accountable and comply with relevant procedure.

Pleading Not Guilty
Pleading not guilty to an offence of this kind will often involve sophisticated and complex briefs of evidence. We will work with you to develop a sound case strategy and work hard to defend you in relation to this charge. We will build a case that will persuade a court to find you not guilty of the charges.

We frequently and successfully defend clients charged with white collar offences in all jurisdictions.

Pleading Guilty
If you decided to plead guilty to a charge of Material Personal Interest – Director’s Duty to Disclose, we will assist you in securing the most favourable sentencing outcome. We will advise you in relation to material that may be obtained to provide context to the offence that has been committed, and ensure the court is fully informed about all relevant background and personal history. We are experienced in supporting clients to achieve the best possible sentence in the circumstances.

Examples of Material Personal Interest – Director’s Duty to Disclose
  • A director owns a business which the company invests in.
  • A director owns property which the company is interested in purchasing.
What is the legal definition of Material Personal Interest – Director’s Duty to Disclose?
A director must disclose a material personal interest where a conflict arises. A personal interest includes (but is not limited to) a legal or equitable interest.

The Corporation Act 2001 defines a ‘director’ as:

  1. a person who:
    1. is appointed to the position of a director; or
    2. is appointed to the position of an alternate director and is acting in that capacity;
    regardless of the name that is given to their position; and
  2. unless the contrary intention appears, a person who is not validly appointed as a director if:
    1. they act in the position of a director; or
    2. the directors of the company or body are accustomed to act in accordance with the person’s instructions or wishes.
Legislation
The relevant legislation which deals with this offence is section 191 of the Corporations Act 2001. Section 191(2) of the Corporations Act 2001 is also relevant as it provides a list of circumstances in which a director does not have to disclose a conflict of interest.

Elements of the offence
To prove this charge, ASIC must show that the accused was a director of a company and that the accused failed to give notice to the other directors of a material personal conflict of interest.

“Can ASIC prove that you did not disclose a conflict of interest?”

Defences
If you are charged with this offence, there are some defences available to you:

  • Factual dispute
  • No duty was owed
  • No conflict existed
  • Notice was given
  • Lack of intent
Section 191(2) of the Corporations Act 2001 removes a director’s need to disclose a conflict of interest if certain circumstances apply.

You should contact us immediately and discuss your case with one of our lawyers if you have been charged with this offence.

Questions in cases like this
  • Did you disclose the conflict to the co-directors?
  • Were minutes of the meeting taken where you made the disclosure?
  • Does a conflict of interest actually exist?
Maximum penalty for section 191 of the Corporations Act 2001
The maximum penalty for Material Personal Interest – Director’s Duty to Disclose (s191 of the Corporations Act 2001) is 10 penalty units (around $1,610.00) or 3 months imprisonment.

Deciding on whether to plead guilty or not has consequences for you and should be made after proper discussion with a criminal lawyer.

Other important resources