AusRAIL, Market Sectors

ASIC sues Fortescue over status of port, rail deals

<p>The Australian Securities and Investments Commission is suing Fortescue Metals and chief executive Andrew Forrest for overblowing the status of deals with Chinese companies to build port and rail infrastructure for its iron ore export project in Western Australia.</p> <p>The port facilities were planned for Port Hedland.</p> <p>The regulator argues in its statement of claim to the Federal Court that Fortescue told investors in 2004 that it had binding contracts with China Harbours Engineering, China Railway Engineering and other Chinese companies to build $1.85bn worth of infrastructure for the project. </p> <p>But the Chinese companies said in March 2005 that the contracts were still under negotiation, with shares in Fortescue falling 25% on the day that the reports appeared in the media.</p> <p>ASIC is suing Fortescue for $3m in damages and $600,000 from Mr Forrest.</p> <p>Fortescue says that it will vigorously defend the charges. </p> <br />