The Australian Securities and Investment Commission (ASIC) has been successful in its case against Harold Mitchell, a former director of Tennis Australia, over his involvement in a deal with Seven Network.
Mitchell has been found guilty on three occasions for breaches of the Corporations Act today, but the court declined to disqualify the prominent media figure from running a company.
The case related to a decision made in 2013 by the Tennis Australia board to award Seven Network the domestic TV broadcast rights for the Australian Open over a five-year period without a competitive tender process.
ASIC alleged that former Tennis Australia president Stephen Healy and Mitchell withheld information from Tennis Australia, failed to ensure the board was fully informed about the interest of other networks, and failed to advise the board to put the rights up for a competitive tender.
Mitchell was a director of Tennis Australia from 2008 and retired from the board in October this 2018. Between 2010 and 2015 Mitchell was the vice president of the company.
In his judgment Justice Beach found Mitchell "stepped over the line" in his dealings with Seven Network's Bruce McWilliam.
As such, Justice Beach found Mitchell breached section 180 of the Corporations Act, which imposes a duty on company directors to discharge their duties with the degree of care and diligence that a reasonable person would exercise.
"There were several things that he communicated to Mr McWilliam that he ought not to have done, particularly in the latter part of 2012," says Justice Beach.
"Now none of this ultimately caused damage to Tennis Australia, and none of this was motivated by anything other than Mr Mitchell's perception that he thought it was in the interests of Tennis Australia that a deal with Seven should be stitched up sooner rather than later.
"But to so conclude does not entail that Mr Mitchell has not contravened some of his directors' duties."
Justice Beach says appropriate punishment for the contraventions would include declarations being made and a moderate penalty imposed without any disqualification order being enforced.
He also dismissed the proceedings from ASIC against Healy with the watchdog to pay his legal costs.
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