The Sydney developer Salim Mehajer has been banned from managing corporations for three years, with the Administrative Appeals Tribunal upholding a ban by the Australian Securities and Investments Commission for his "cavalier approach".
The number of bans is significant given that offenders convicted of market manipulation in the criminal courts are also subject to automatic disqualification from managing corporations in Australia for five years.
In August the AAT upheld Asic's decision last November to disqualify Mehajer from managing corporations for three years, as there was a "need for such a disqualification in the public interest as a means of protecting others from his incompetence".
So it's not a bad thing, or even necessarily financially disadvantageous, for executives to think broadly about societal benefit when managing corporations and in my experience, many do so.
He transformed the company from a chaotic family business to a professionally managed corporation that surprised Wall Street.
The professionally managed corporation was a new type of institution.
When leaders manage corporations authentically, not superficially, he sees the results as sustained high levels of profit.
A company's health not its shareholders' wealth should be the primary concern of those who manage corporations.
We believe that this approach will provide superior incentives for executives to manage corporations in investors' longer-term interest, and diminish their incentives to make public statements, manage earnings, or accept undue levels of risk, for the sake of short-term price appreciation.
Mehajer, the former deputy mayor of Auburn council, has been banned until 5 November 2018 after Asic found his "inability to manage corporations to the standard expected of him" led to SM Property Development and SM Engineering and Constructions failing, owing $886,701 and $159,9026 respectively to the tax office.
