by Staff Writers
Sydney (AFP) Oct 2, 2012
Australian mining magnate Andrew Forrest on Tuesday won a High Court appeal against a ruling that he misled investors on Chinese deals that could have seen him banned as a company director.
The billionaire founder of iron ore giant Fortescue Metals Group was facing a multi-million dollar fine and directorship ban after the Federal Court ruled last year that he misled the market on a project in 2004.
Forrest told investors Fortescue had secured "binding" agreements with three state-owned Chinese contractors to build a mine, railway and port in Western Australia's Pilbara region when only framework documents had been signed.
News of the deals drove a massive spike in Fortescue's share price before speculation that they were not binding sent the stock tumbling.
They ultimately failed to come to fruition and the Australian Securities and Investments Commission launched legal action alleging misrepresentation.
The corporate watchdog lost a Federal Court case in 2009 but successfully appealed that decision in 2011.
But the High Court on Tuesday ruled unanimously that the statements made by Fortescue and Forrest were "neither false nor misleading" and did not contravene the Corporations Act.
"There was no evidential basis for assuming that a person hearing or reading these statements would understand that the parties had entered into agreements that would be enforced by an Australian court according to Australian law should a dispute ever arise between them," it said.
The West Australian-based Fortescue is currently struggling with a commodities slowdown due to China's cooling and last month deferred two planned expansions and said it would cut jobs.
Forrest stepped down as chief executive of the company last year but remains its chairman.
Global Trade News
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WTO appoints expert panel in long-running China-US dispute
Geneva (AFP) Sept 28, 2012
International trade arbiter the World Trade Organization on Friday appointed a panel of experts to investigate the latest in a series of disputes involving China and the United States. The procedural measure, taken by the organisation's Dispute Settlement Body, comes after Beijing complained that Washington had imposed so-called "countervailing duty measures" on many Chinese products which t ... read more
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