Australia's corporate watchdog has lost a case over its indictment against Australian iron ore miner Fortescue Metals Group Ltd. (Fortescue) CEO Andrew Forrest when a Federal Court decided against the claims that he and his company deceived investors, Australian press reported on Thursday.
Fortescue faced a suit from Australian Securities and Investments Commission (ASIC) which alleged that the company misled the market in 2004 regarding deals with three major state-owned Chinese companies. In the Federal Court in Perth, ASIC's legal representative Neil Young had said that Fortescue and its Mr. Forrest had made certain misleading announcements as part of an aggressive public relations campaign.
The Court, on Wednesday dismissed the case and cleared Mr. Forrest and Fortescue of wrongdoing. According to reports by Australian press, in a 299-page judgment, the court called ASIC's claim that Mr Forrest had no legal basis to make the claim about the agreements "surprising", as it was clear he had advice from the company's in-house lawyer to that effect. "It is difficult to discern why ASIC ran a case alleging that (Fortescue's) board could not have made the disclosures it did if it had obtained competent legal advice," the court verdict read.
In addition to the fines worth 9.6 million dollars, the regulator's action threatened Mr. Forrest to lose his seat in the company. Mr Forrest founded Fortescue in 2002 and owns 32 percent of the group which corresponds to 4.3 billion dollars.
Mr. Forrest reportedly said that the ruling "completely vindicated the decision to defend ASIC's claims against Fortescue Metals Group and me". "I'd like to take this opportunity to thank God, the Australian judicial system and my family and friends for their unswerving support throughout the proceedings."