License article

Time to make 'an example' of hoaxers

WHITEHAVEN COAL has joined the corporate watchdog in investigating legal recourse against the man whose hoax temporarily wiped more than $314 million off the value of the company.

The hoax, by anti-coal campaigner Jonathan Moylan, tricked investors into thinking that a recent $1.2 billion loan arranged by ANZ for Whitehaven had been cancelled on ethical grounds.

The incident is the third time in six months that trading on the stock exchange has been influenced by a hoax, and Allion Legal's corporate law expert, Simon Rear, said it was time a strong disincentive was provided to other hoaxers.

''There probably needs to be some more examples made of people and I think that's probably what ASIC will try to do,'' he said.

''Legislation is only as strong as it can be enforced, and it is always enforced after the fact.''

David Jones was drawn into a takeover hoax in July while contractor MacMahon Holdings was the subject of a hoax in October.


Mr Moylan's hoax was presented as a press release from ANZ and was reinforced by Mr Moylan taking media phone calls while pretending to be a member of the bank's communications staff.

Shares in Whitehaven, which counts struggling coal baron Nathan Tinkler as its biggest shareholder, quickly fell from $3.52 to $3.21 before the stock was put into a trading halt. By mid-afternoon the share price had recovered and the stock closed only 2¢ lower at $3.50.

But those investors who sold their shares at the lower prices appear to have lost their money, with the ASX confirming the trades would not be cancelled.

Whitehaven's managing director, Tony Haggarty, said the company would look at all options to protect its shareholders.

''Whitehaven will liaise with the ASX and ASIC in relation to Mr Moylan's irresponsible and ill-

conceived conduct and trusts those authorities to take the appropriate action,'' he said. ''Whitehaven is also investigating any legal action that maybe available to it and its shareholders.''

ASIC said its inquiries would focus on section 1041E of the Corporations Act which refers to false or misleading statements. ''If there appears to be a breach, ASIC will investigate and take timely and appropriate action,'' a spokesman said.

Mr Rear said criminal liability can prevail under section 1041E, while civil liability was covered by a similar clause of the Corporations Act: provision 1041H.

ANZ, whose corporate logo was involved in the hoax, said it would co-operate with investigations, but Mr Rear said the bank may have avenues of recourse under intellectual property laws.