BioTech Ltd ('BTL') is a pharmaceutical company that has extensive experience in developing vaccines. The CEO and Managing Director of BioTech is Erik, who also owns 51% of the company's shares and is a billionaire. In late 2019, the board of BTL decides to develop a vaccine for a new virus that is quickly spreading around the world. Erik engages BTL's research team to gather information about the new virus and after several months the research team believe that they may have a potential pathway to developing a vaccine.

Vaccine development is a resource intensive process, so Erik decides that the vaccine development will be conducted by a new company, BTL (Vaccine) Pty Ltd ('BTLV'), which has Erik as a majority shareholder with 51% of the shares and other shareholders made up of the 100 employees who work across BTL's various businesses. The sole director of BTLV is the BTL company secretary, and all management decisions for BTLV are decided by the BTL board and then implemented by the BTLV director. The BTLV workforce are employed by BTL and work on BTLV projects under the instructions of Erik. The funding for BTLV comes from selling $50 million in shares to the employees and Erik (a decision approved by the BTL board). Each of the employees were already shareholders in BTL, so they were not provided a prospectus for the share issue, but rather were given a detailed email outlining the risks and potential benefits of purchasing the shares in BTLV. The share issue was so popular that Erik is considering having BTLV issue another $20 million in shares to relatives of the BTL employees who purchased shares in the first share issue by BTLV.

During the final stages of the vaccine development process, Erik receives information (the 'risk report') from one of the junior employees who is working under Erik's direction for BTLV that there may be a small risk of dangerous side effects for some patients who take the vaccine with particular underlying conditions. Erik (who has a PhD in bio-medical science) believes that the risk is so small that it does not need to be disclosed to the Therapeutic Goods Administration (which approves vaccines for public release) and so BTLV says nothing further about the risk report. The price of BTLs shares has increased dramatically during the final stages of vaccine development and so Erik is reluctant to slow or stop the vaccine roll-out as it will cost him a lot of money.

The board of BTL follows its standard practice of releasing the new vaccine under a new subsidiary BTL (2021) Pty Ltd ('2021PL'), which has a license from BTLV to distribute and sell the vaccine. BTLV has a profit-sharing arrangement with BTL for the profits from selling the vaccine (95% for BTL and 5% for the BTLV shareholders).

2021PL is wholly owned by BTL, with a junior BTL accountant as the sole director, but it has no assets and no independent employees. 2021PL does have a separate bank account from BTL. BTL intends to provide funding to pay 2021PLs bills as needed, though it is under no legally enforceable obligation to continue doing so.

Within months of regulatory approval being given to release the vaccine, several patients suffer severe reactions and wish to sue for compensation.

1A. You are a class actions lawyer for Maurice & Gordon Lawyers who has been asked by your supervising partner to advise on who may be potential defendants in the class action. Assume that there has been negligence in releasing the vaccine to the public and only advise on who may be sued as a defendant.

1B. What action (if any) could ASIC take under the Corporations Act 2001 (Cth) in respect of the above conduct?