MELBOURNE, March 1 (Reuters) – Australia’s corporate regulator has launched action against coal miner TerraCom Ltd (TER.AX) for breaching whistleblower protections after a former employee claimed that it had falsified the quality of its coal for export.
The Australian Securities and Investments Commission (ASIC) has been investigating TerraCom over allegations of inflated coal quality in export documentation since claims were first aired in early 2020 as part of an unfair dismissal suit.
TerraCom has said it “categorically denies” the allegations.
Australia is a major exporter of thermal coal used in power stations, and the scandal raised concerns over practices in the A$76 billion ($51.06 billion) export industry.
The case to be filed in the Federal Court of Australia against TerraCom and a suite of executives is the first time ASIC has taken action for alleged breaches of the whistleblower provisions, ASIC Deputy Chair Sarah Court said.
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“ASIC alleges that TerraCom and its senior company employees engaged in conduct that harmed a whistleblower who revealed the alleged falsification of coal quality certificates,” she said.
“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.”
TerraCom said it will “vigorously” defend the proceedings in a filing to the stock exchange on Tuesday. Shares of the Queensland-based miner fell more than 4% in early trade.
The export quality claims sparked an internal review by assayer ALS Ltd (ALQ.AX), which was also investigated by ASIC in relation to the TerraCom allegations.
ALS, one of the world’s biggest laboratory service providers, launched an investigation that year that found about half of the certificates it provided for coal export samples over the previous decade had been altered to improve quality. ALS subsequently overhauled its business.
After ALS released its findings in 2020, South Korean utility Korea South-East Power banned it from certifying its coal tenders.
($1 = 1.4885 Australian dollars)
Reporting by Melanie Burton in Melbourne and Savyata Mishra in Bengaluru; Editing by Sherry Jacob-Phillips and Christopher Cushing
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