Forrest, Fortescue to take legal battle with ASIC to High Court
Mining magnate Andrew ''Twiggy'' Forrest says the High Court has vindicated his six-year fight against allegations by the corporate watchdog that he misled investors.
Mr Forrest and Fortescue Metals Group have been granted leave by the High Court to appeal a Federal Court ruling that they misled the market in 2004 about ''binding'' deals with three Chinese firms.
The result means Mr Forrest can remain chairman of the iron ore miner at least until the outcome of the appeal at a date to be set.
The Australian Securities and Investments Commission has vowed to defend the appeal, saying the case raised important issues for confidence in Australian markets.
ASIC first launched its legal action against Fortescue and Mr Forrest in 2006, claiming they had misled the market and breached continuous disclosure rules, and that Mr Forrest had breached his duty as a director.
A Federal Court trial dismissed the case, but in February ASIC won with an appeal to the full bench of the Federal Court.
Now Mr Forrest can also appeal, after telling two High Court judges in Adelaide yesterday he'd been denied natural justice by the Federal Court.
QC for ASIC Neil Young argued there were no special grounds to appeal because the Federal Court had decided the matter on fact - that the deals were not binding and, therefore, investors were misled.
''It is our submission the full court rightly considered that the statements were misleading with regard to what the underlying reality was,'' he said.
But Mr Forrest's lawyer, Allan Myers QC, said Mr Forrest believed the agreements were binding but didn't have a team of lawyers in 2004, just a short time after Fortescue had been a small operation run from ''Mr Forrest's lounge room''.
He said the Federal Court failed to consider all the evidence available to the first trial judge, who found Mr Forrest believed his statements were true about the ''binding'' deals to build and finance infrastructure in the Pilbara.
''Not one of those 122 documents was referred to in the findings of the full court,'' Mr Myers said.
''We say ... that was denial of natural justice to Mr Forrest. This is a very important matter to my client.''
Mr Forrest and his company could incur million-dollar penalties and he faces a temporary ban on being a company director pending the outcome of the High Court appeal.
High Court judge Robert French granted the leave to appeal but told Fortescue and Mr Forrest to narrow their grounds.
ASIC acting chair Belinda Gibson said ASIC would defend the appeal.
''This case raises important issues which form the bedrock of confidence in the integrity of our markets, including misleading and deceptive conduct, continuous disclosure and directors' duties,'' she said.