ASIC wins FMG appeal

Saturday, 19 Feb 2011

The West Australian reported that the Federal Court agreed with the Australian Securities and Investments Commission's argument that Justice John Gilmour erred in finding Mr Forrest and his Fortescue Metals Group did not act dishonestly when they announced they had signed Chinese partners to build their Pilbara project.

Billionaire Mr Andrew Forrest faces being banned from running the company he turned into the country’s third biggest iron ore producer after the nation's corporate watchdog won its Federal Court appeal.

ASIC successfully argued that Mr Forrest deliberately engaged in misleading and deceptive conduct by making false, misleading and exaggerated statements to the ASX and the media about the nature of framework agreements signed in 2004 with three Chinese companies.

The agreements concerned the construction and financing of a mine, railway and port in the Pilbara. ASIC argued that Fortescue and Mr Forrest falsely portrayed the agreements as binding.

A judge had dismissed the watchdog’s claims in December 2009 following a trial in the Federal Court. But ASIC appealed against the finding in February last year, arguing the case had raised important issues that needed to be heard by an appeals court.

The six day appeal was heard in November last year before the Full Bench of the Federal Court, comprising Chief Justice Patrick Keane, Justice Arthur Emmett and Justice Ray Finkelstein.

Mr Forrest was not in court to hear the decision, which followed an appeal hearing in November after Justice Gilmour's 2009 judgment.

FMG and Mr Forrest have always denied any wrongdoing in the case.

(Sourced:thewest.com.au)