High Court rules on Forrest’s Chinese deals

The High Court will hand down its ruling on ASIC's case against Fortescue Metals, which may determine the future of Andrew Forrest's leadership of the company

ASIC is pursuing Andrew Forrest over claims he 'misled' investors in 2004.

The original case, which has gone to court, been dismissed and brought back once again on appeal, focuses on ASIC's claims that Forrest misrepresented agreements Fortescue Metals Group had with three Chinese companies.

It stated that Forrest had no basis for public statements indicating the Chinese companies had agreed to finance a rail and port project in the Pilbara.

Fortescue hit back saying it had a genuine and reasonable belief the framework agreements made between the two parties were legally binding.

According to ASIC investors in FMG were mislead and it was not made clear to them certain aspects of the deal were yet to be finalised.

While the 2004 framework agreements saw a spike in FMG's share price the deal never eventuated.

While the court initially sided with Fortescue, ASIC appealed the decision in April, despite the High Court labelling some of its arguments against Forrest as 'embarrassing'.

Now the court is expected to hand down its final ruling today, according to the ABC.

If it rules against Forrest, it could see him forced to step down from the board of Fortescue, and banned from being a company director.

 

UPDATE:

The High Court has ruled against ASIC's appeal.

It has also ordered ASIC to pay all of Forrest's legal costs.

This decision brings to an end close to six years of legal wrangling, and reinstates the original ruling of Judge Gilmour that Forrest's representation of the deal was neither false nor misleading.

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