Regulator launches action against Whitlam

High-profile Australian businessman Nicholas Whitlam faces court action.

SYDNEY, Australia (CNN) -- Australia's corporate regulator has launched civil action against high-profile Sydney businessman Nicholas Whitlam.

Whitlam, who is president of NRMA Ltd and former chairman of NRMA Insurance Group, is the son of former Australian prime minister Gough Whitlam.

Australian Securities and Investments Commission chairman David Knott said ASIC is taking civil action in the New South Wales Supreme Court, alleging Whitlam breached his duties as an officer of NRMA Ltd and NRMA Insurance.

Knott said ASIC wanted Whitlam disqualified from managing or being a director of a company and was also seeking financial penalties against him.

NRMA Ltd, based in Sydney, is a roadside service company for members of the former mutual organization National Roads and Motorists Association. NRMA Insurance is a separate company handling motor vehicle and general insurance.

Stepped down as NRMA Insurance chairman

Whitlam announced he was stepping down as chairman of NRMA Insurance in April, at the same time as the board sacked the company's chief executive, Eric Dodd.

The board said then it had decided to terminate Dodd because "a majority of directors had lost confidence in (him) for reasons of both his own performance as CEO and his relationship with the chairman (Whitlam)."

ASIC said the allegations related to Whitlam's conduct during the NRMA Ltd annual general meeting in 1998.

"ASIC alleges that Mr Whitlam, as chairman of the meeting, breached his duties by not voting certain member proxy votes that were directed against a resolution relating to the remuneration of the company's directors."

It said the allegations in relation to NRMA Insurance "concern alterations to proposed minutes of the August 2000 board meeting relating to the chairman's remuneration".

'Serious' breaches

Whitlam was chairman of NRMA Insurance at the time.

Knott said that while the action did not constitute criminal proceedings, the alleged breaches were serious enough for ASIC to seek orders disqualifying Whitlam and imposing fines.

Whitlam has launched his own action against NRMA Insurance, seeking a retirement benefit.

He was not available Thursday to respond to the ASIC move.