asic takes twiggy, fortescue to court, page-3

It was five years ago ...build a bridge ASIC

By Chelsea Mes

April 03, 2009 01:04pm

THE corporate watchdog has launched proceedings against Andrew 'Twiggy' Forrest, formerly Australia's richest man, and his mining company Fortescue alleging "he seriously misled" the market.

In a statement released today, ASIC said the case centred on a series of announcements made by Fortescue Metals Group (FMG) to the market in late 2004 regarding agreements with three state-owned Chinese companies.

ASIC alleges FMG and Mr Forrest "overstated the substance and effect" of the agreements.

"Mr Forrest was well aware there was a significant and growing 'gap' between what the market had been told and what actually appeared in the agreements, but did nothing to correct the position and instead perpetuated the misleading statements," ASIC claims.

The true content of the agreements was revealed by the media in March 2005, sending Fortescue's share price down 25 per cent in one day.

ASIC is seeking more than $10 million in penalties as well as asking the Federal Court to consider disqualifying Mr Forrest as a director.

The court proceedings will begin in Perth on Monday