ASIC sues coal company over whistleblower response

Queensland miner TerraCom and a clutch of its executives face Federal Court action over treatment of a whistleblower who raised allegations of phoney coal quality test results. The Australian Securities and Investments Commission (ASIC) has commenced civil penalty proceedings against TerraCom, its managing director Daniel McCarthy, chief commercial officer Nathan Boom, former chair Wal King and former director and deputy chair Craig Ransley. The company has engaged lawyers and says it will vigorously defend the proceedings. ASIC deputy chair Sarah Court described the action against TerraCom as a significant case, being the first time ASIC had taken action for alleged breaches of the whistleblower provisions. "ASIC alleges that TerraCom and its senior company employees engaged in conduct that harmed a whistleblower who revealed the alleged falsification of coal quality certificates," she said. "Whistleblowers perform a vital role in identifying and calling out corporate misconduct. "We take any indication that companies are engaging in conduct that harms or deters whistleblowers very seriously." Related: TerraCom comments after ASIC raid at Blair Athol TerraCom operates the Blair Athol coal mine in Central Queensland, as well as having operations in South Africa. The ASIC action centres on TerraCom announcements to the ASX in February and April 2020, and an open letter to shareholders published in the Australian Financial Review and The Australian in March 2020. The announcements and open letter denied the whistleblower’s allegations and stated that TerraCom had the allegations independently investigated, ASIC said. ASIC alleges that Mr McCarthy, Mr Boom (who was chief financial officer at the relevant time), Mr King and Mr Ransley, who were all members of TerraCom’s disclosure committee, failed to take reasonable steps to ensure statements to the ASX were not false or misleading. ASIC alleges that, by allowing the false or misleading statements to be published, they caused detriment to the whistleblower’s reputation, earning capacity and psychological and emotional state. Further, ASIC alleges that Mr McCarthy, Mr Boom, Mr King and Mr Ransley failed to take reasonable steps upon receipt of the independent investigator’s report into the issues raised by the whistleblower, in breach of their duty to exercise reasonable care and skill in the discharge of their duties as directors and officers of TerraCom. ASIC is seeking declarations of contravention, pecuniary penalties, disqualification orders and costs. The date for the first case management hearing is yet to be scheduled by the court.

ASIC sues coal company over whistleblower response

Industry Queensland

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