The High Court of Australia has ruled that Fortescue Metals’ Chairman and former CEO, Andrew Forrest, was not liable in potentially misleading investors, overturning a previous Federal Court.

 

The previous Federal Court ruling forbade Mr Forrest from assuming a director position of the company that he founded, and any other company in the future.

 

The ruling brings to an end a six-year court case, prosecuted by the Australian Securities Investments Commission, and now means Mr Forrest may return to his duties as Chairman and CEO.

 

ASIC alleged that Fortescue had mislead investors by claiming that framework agreements with Chinese investors to extensively develop Fortescue’s assets were binding, when no such binding agreements had been made.

 

The High Court ruled that the agreements as stated by Fortescue on the ASX and through various media statements were not implied to be binding.

 

In handing down the decision, the High Court said of statements “that Fortescue and the Chinese state-owned entities had entered into agreements that each intended to be  binding. This representation was neither false nor misleading.”

 

The High Court noted that Fortescue’s ASX statements “accurately recorded what the framework agreement provided.”

 

The High Court has ruled that ASIC must pay for the full costs of the Federal Court, Full Federal Court and High Court proceedings.