Twiggy out of the woods
Andrew Forrest has once again beaten the system, the odds and the corporate cops — the Australian Securities and Investments Commission.
The High Court of Australia handed down a decision today that the iron ore billionaire had not misled his shareholders, didn't engage in deceptive conduct and didn't contravene continuous disclosure obligations or his directors' duties.
It was a comprehensive victory for Forrest and the now multi-billion dollar company he started 10 years ago from his livingroom in Perth.
The spectre of being banned from being a company director — the ignominy and the practical consequences that go with that — has now disappeared.
The allegations have dogged Forrest for six years since ASIC launched a legal action in the Federal Court in Western Australia saying statements made by Forrest were either wrong, or he should have known them to be so.
While the this trial hearing brought down a full-blooded judgment in favour of Forrest and Fortescue and a strongly critical assessment of ASIC's case, the regulator appealed the decision.
For ASIC, the precedent set by the West Australian decision was too far-reaching and its ramifications too important for continuous disclosure laws to be left without challenge.
The full Federal Court took a very different view and found in favour of ASIC.
Forrest couldn't let this decision sit. His reputation and his role as chairman of Fortescue and a number of other corporate and charity boards were in jeopardy.
At the heart of the case was public and ASX statements made by Forrest and Fortescue in 2004 and 2005 that the company had entered into binding contracts with a number of Chinese state-owned entities to finance and build a series of infrastructure projects for Fortescue's then fledgling mining operations.
These agreements ultimately didn't proceed but the company found other means and parties to undertake the funding and build of its ports and railways.
In the intervening years since Forrest made these statements Fortescue has grown to be a large player in the international iron ore market and the day-to-day operations have been handed over to professional manager Nev Power.
But Forrest is never far from the action and took a lead role in a recent refinancing of the heavily geared company.
Meanwhile, corporate lawyers around Australia will be poring over the decision to access its wider ramifications around what information companies and directors can and cannot make public.