FMG calls in ASIC over ‘misleading’ investment reports

Fortescue Metals Group has called in ASIC to investigate an investment advisor which it claims is publishing bogus reports about the company.

The action revolves around two reports J Capital Research published in May and September about FMG’s iron ore operations, and its exports to China.

An exclusive by The Australian reveals FMG told the Australian Securities & Investments Commission the first reports suggests that “FMG and its senior management has made claims as to financial position that are false (and/or) FMG and its senior management have been dishonest or deceptive by telling ‘stories’ and engaging in trickery that understates its true production costs and misrepresents its debt position and break-even price for iron ore”.

In the report, J Capital suggests FMG’s costs per tonne are $US 7 higher than the company claims and that the investment group doesn’t believe that FMG has its debt down by $US3.1 billion or that its break-even price for 62 per cent FE fell to $US70 a tonne.

FMG has also taken exception with the second report which states its iron ore is struggling to sell and more than six million tonnes of it remains stock piled at Chinese ports with nowhere to go.

FMG’s external relations director has reportedly told ASIC that these claims were “inaccurate, misleading and without any reasonable basis”, and said J Capital had broken both the Corporations and ASIC Act.

It wants the regulatory body to “pursue a detailed investigation”.

The Australian said FMG has also made legal threats to J Capital and its director Tim Murray.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.