ASIC has taken action against TerraCom and senior company figures for engaging in conduct that caused harm to a whistleblower who raised serious misconduct regarding the company’s operations.

TerraCom is an ASX-listed coal producer in Queensland.  A former employee made a whistleblowing report that the company engaged in illegal conduct, by falsifying its coal quality certificates.

TerraCom publicly denied the whistleblower’s allegations and published two ASX announcements.

ASIC’s case is against TerraCom and four senior company figures:

  • former Chair Wallace Kind
  • former Director Craig Ransley
  • current Managing Director Daniel McCarthy
  • Chief Commercial Officer Nathan Boom

ASIC claims they damaged the reputation and credibility of the whistleblower by making those announcements and failing to take reasonable steps to ensure that the statements were not false or misleading.  ASIC also alleges that the conduct caused detriment to the whistleblower’s earning capacity and psychological and emotional state.

This is a significant case because it is the first time ASIC has taken action for alleged breaches of the whistleblower provisions.

Whistleblowers perform a vital role in identifying and calling out corporate misconduct. We take any indication that companies are engaging in conduct that harms or deters whistleblowers very seriously.

Sarah Court – ASIC Deputy Chair Sarah Court

This is a timely reminder for companies to ensure they have appropriate systems in place to protect whistleblowers from detriment.  The penalties for failing to protect whistleblowers against detriment in Australia are significant and include financial penalties against the company and the individuals involved, as well as possible jail time.   ASIC has reiterated that combatting governance failures will remain a key priority.

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