The Australian Securities and Investments Commission’s (ASIC) proceedings against Fortescue Metals Group Ltd (FMG) and its CEO Andrew Forrest will commence in Perth on Monday 6 April 2009. The hearing is before Justice Gilmour and is set down for five weeks.
Tony D’Aloisio, Chairman of ASIC, said the case will examine the responsibility of listed companies and its executives to keep the market properly informed in relation to disclosable agreements.

‘Keeping markets properly informed underpins confidence in the integrity of our markets and in doing so, it assists in keeping the cost of capital low which is important as our companies recapitalise,’ he said.

The case centres on a series of announcements FMG made to the market between 23 August 2004 and 9 November 2004 concerning certain framework agreements with three major state owned Chinese companies.

ASIC alleges that FMG engaged in misleading and deceptive conduct by overstating the substance and effect of agreements with the three Chinese companies, in announcements and media releases made to the market and investors. ASIC also alleges FMG failed to comply with its continuous disclosure obligations under the Corporations Act (the Act) by failing to correct the misleading announcements and disclose the contents of the agreements.

The full announcement is available at ASIC.