Fallen MFS boss King’s court win is reversed

FALLEN businessman Michael King has had a court victory reversed after an appeal from the corporate regulator.

Mr King is the former CEO of the MFS Group of companies who, along with four other former executives, in 2017 was ordered to pay $615 million in compensation to investors for breaches of the Corporations Act owing to the collapse of the $2.5 billion MFS investment empire in 2008.

The 217 breaches were committed in relation to misappropriation of $147.5 million that had been held by the managed investment scheme known as the Premium Income Fund (PIF) on behalf of unitholders.

In 2018 the Queensland Court of Appeal found Mr King had not contravened the Corporations Act as an “officer” of the company at the time and his contraventions were limited to his being “knowingly concerned” with the company’s misapplication of $130 million of PIF’s money. Mr King had ceased to be a director of MFS Investment Management Pty Ltd, which was the responsible entity for PIF, in 2007.

However, yesterday, the High Court of Australia set aside the previous decision and allowed the appeal.

It found Mr King was in fact an “officer” because although he held no named office at MFSIM, he was still the “overall boss” and assumed “overall responsibility for MFSIM”.

ASIC commissioner John Price said the decision sent a clear signal to anyone running a company that they should be responsible and would be held accountable for their actions.