PERTH (miningweekly.com) – The Australian Securities and Investment Commission (ASIC) has started civil proceedings against ASX-listed coal producer TerraCom, MD Daniel McCarthy, chief commercial officer Nathan Boom, former chairperson Wallace King and former director and deputy chairperson Craig Ransley.
The case concerns the conduct of TerraCom and its directors and officers following whistleblower allegations made by a former employee that TerraCom had been involved in the falsification of coal quality results.
“This is a significant case because it is the first time ASIC has taken action for alleged breaches of the whistleblower provisions. ASIC alleges that TerraCom and its senior company employees engaged in conduct that harmed a whistleblower who revealed the alleged falsification of coal quality certificates,” said ASIC deputy chairperson Sarah Court.
“Whistleblowers perform a vital role in identifying and calling out corporate misconduct. We take any indication that companies are engaging in conduct that harms or deters whistleblowers very seriously.”
TerraCom in 2020 made two ASX announcements and published an open letter to shareholders in the Australian Financial Review and The Australian denying the allegations and stated that TerraCom had the allegations independently investigated.
ASIC alleges that McCarthy, Boom, who was CFO at the relevant time, King and Ransley, who were all members of TerraCom’s disclosure committee, failed to take reasonable steps to ensure statements to the ASX were not false or misleading.
The announcements followed TerraCom’s independent investigation, dismissing the whistleblower allegations.
ASIC also alleges that, by allowing the false or misleading statements to be published, TerraCom, McCarthy, Boom and Ransley engaged in conduct that caused detriment to the whistleblower’s reputation, earning capacity and psychological and emotional state.
Further, ASIC alleges that McCarthy, Boom, King and Ransley failed to take reasonable steps upon receipt of the independent investigator’s report into the issues raised by the whistleblower, in breach of their duty to exercise reasonable care and skill in the discharge of their duties as directors and officers of TerraCom.
ASIC is seeking declarations of contravention, pecuniary penalties, disqualification orders and costs.
TerraCom on Thursday acknowledged the legal proceedings, saying the company had engaged lawyers and would vigorously defend the proceedings.