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Professional Conduct Tribunal - October 2008

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22 October 2008

Geoffrey William Vines CA of New South Wales

On his own admission the Tribunal found a case established that Mr Vines was liable to disciplinary action in accordance with Bylaw 40(e), in that the New South Wales Court of Appeal in its judgment in Geoffrey William Vines v Australian Securities and Investments Commission delivered on 4 April 2007 upheld findings by Mr Justice Austin in ASIC v Vines that, as the Chief Financial Officer of GIO Australia Holdings Ltd (“GIO”) at the time of a takeover bid for the company, he had contravened his duty of care and diligence when:

he signed the Management Sign Off having failed to take positive steps to advise the Due Diligence Committee of the basis of the assumptions underlying the profit forecast;

he supported the integrity of the GIO profit forecast to the Due Diligence Committee; and

in the period after the Part B issued, he failed to give attention to whether the GIO Re profit forecast would be achieved,

with the Court ordering on 22 June 2007 that he pay a pecuniary penalty of $50,000.

The decision of the Tribunal was that Mr Vines be reprimanded and required to pay $1,000 plus GST towards the costs of the disciplinary action. The Tribunal had regard to the six-year period over which this matter has been prosecuted by ASIC, including hearings by the first court and then hearings on appeal. The Tribunal noted that a majority of the Court of Appeal upheld three decisions of the first court but upheld the member's appeal on another four findings of the first court. Both courts acknowledge that the fundamental matter concerned was a matter of judgment on technical accounting issues and business judgment in respect of the preparation and issue of a Part B statement in connection with a public company takeover offer. Neither court found against the member on matters of honesty and integrity.