FMG and Andrew Forrest cleared of deceptive conduct

West Australian mining magnate Andrew Forrest has been cleared of misleading and deceptive conduct by the Federal Court.


The Australian Securities and Investments Commission alleged that Mr Forrest and his company, Fortescue Metals Group, had breached the corporations act 22 times.
However, the regulator was unable to provide proof of its claims which relate to statements made by the company in late 2004 about Chinese investment in its iron ore project in Western Australia's Pilbara region.

Mr Forrest was facing a life ban on being a company director and he and FMG could have been fined millions of dollars.

Both he and the company argued they acted in good faith and Justice John Gilmour took seven months to reach his decision.

Justice Gilmour has ordered ASIC to pay all legal and court costs.
It's the third failed prosecution brought by ASIC in recent times, after cases against telecommunications company One.Tel and grain marketer AWB collapsed.
A corporate law specialist says ASIC should take on board criticism by the Federal Court when considering future litigation.

Professor Ian Ramsay from the Centre for Corporate Law at Melbourne University says the case was a blow for ASIC'S reputation and budget.

"ASIC has to make critical decisions about how it spends its taxpayer funds" he says.
"It has an annual budget is in the order of something like $300 million so where we have one piece of litigation that in effect may cost $10 million or indeed in the OneTel matter, the total cost could go up to $30 million.
"That's an extraordinary hit to the annual budget."

source :www.abc.net.au