Fortescue to appeal Federal Court ruling while Forrest admits he could have done better
Fortescue Metals Group Ltd (ASX: FMG) boss Andrew Forrest will appeal the shock ruling on Friday by the Federal Court that could lead to him being banned as a company director for breaching the Corporations Act.
On Friday, the full bench of the Federal Court has upheld an appeal lodged by the Australian Securities and Investments Commission (ASIC) against the December 2009 judgment handed down by Judge Gilmour who ruled the corporate watchdog had not proven Forrest and FMG misled investors over the nature of infrastructure contracts signed with several Chinese companies in 2004.
At a Perth press conference this morning, the mining magnate maintained he was innocent of the allegations brought forth by the ASIC and told reporters he would seek leave to have the matter appealed at the High Court.
Mr Forrest stressed that at the time he believed the agreement with the Chinese companies was binding, although he conceded that he could have done things better.
"When you look at Fortescue, which (at the time) was probably myself and a dog, ... we could have done so much better," he said.
"We should have had lawyers and we should have had legal teams and whole departments, but we didn't.
"We were a start-up company. We had none of those resources and did the best we could, but we certainly believed a deal was a deal.
"When it is celebrated on Chinese media, signed off by the chairman of their company that under Chinese tradition never sign anything which isn't binding, then we could take that forward with strength."
Fortescue's announcements about the "binding" Chinese deals resulted in a sharp increase in its share price, with Justice Finkelstein noting on Friday that the value of Mr Forrest's shareholding soared by more than $200 million.
Before Mr Forrest's statement today, Fortescue shares were down 16 cents, or 2.2 per cent, to $6.72, against a 1 per cent drop in the benchmark S&P/ASX 200 index. shares in the company continued to decline and were down 2.76 per cent after Mr Forrest said he had no intention of standing aside from the company until an appeal is heard.