Brisbane-based thermal coal producer TerraCom (ASX: TER) has been hit with a $7.5 million fine plus $1 million in legal costs over a whistleblower victimisation charge brought by the corporate watchdog after a Federal Court ruling this week brought an end to a five-year battle for the company.
The whistleblower case brought against TerraCom by the Australian Securities and Investments Commission (ASIC) was triggered after a former commercial general manager of the company alleged that TerraCom was involved in a scheme relating to “fake analysis of coal samples”.
However, these claims were ultimately dismissed by the Federal Court last month after ASIC brought action in 2023 against TerraCom’s current managing director Daniel McCarthy and former officers Nathan Boom, Wal King and Craig Ransley.
ASIC had alleged that the directors authorised or permitted false or misleading information to be given to the ASX, but the allegations were rejected by Federal Court Justice Jackman on 4 July 2025.
However, the Federal Court this week approved the whistleblower penalty after TerraCom earlier this year announced to the market hat it had reached a penalty agreement with ASIC to resolve the proceedings.
The penalty decision handed down this week also included an order that TerraCom pay ASIC’s legal costs of $1 million.
The whistleblower case against TerraCom stemmed from two ASX announcements made by the company in 2020 and an open letter that the company published to shareholders in the Australian Financial Review (AFR) and The Australian about a month after the ASX announcements.
The first announcement, issued on 14 February 2020, responded to an AFR article that publicly revealed the whistleblower’s allegations.
In this announcement, TerraCom “categorically” denied the allegations that it had altered reports about the quality of its coal exports.
The announcement also named the whistleblower and informed the market that the allegations were made after he had been made redundant in August 2019 following a probationary period of employment.
The second announcement, on 3 April 2020, repeated the fact that the whistleblower had made the allegations after a company-wide redundancy program. It also stated that an independent forensic investigation found the allegations to be “unfounded”.
The court heard that on 12 March 2020, after many unsuccessful attempts to have the ASX publish another announcement to the market, TerraCom published an open letter in the AFR and The Australian newspapers in which it continued to “categorically deny” the allegations made by the whistleblower.
Among other claims, the open letter also stated that, following his dismissal, the whistleblower had initiated proceedings in the Fair Work Commission “only after TerraCom decided not to meet his demands, which apart from wanting his job back, included a request for a $5 million financial payment in return for not pursuing TerraCom over his dismissal”.
ASIC says that TerraCom admitted that the announcements caused “detriment to the whistleblower in the form of hurt, humiliation, distress and embarrassment”.
The regulator says the company also admitted that these announcements “damaged his reputation by representing him as someone willing to make unfounded accusations for personal gain in circumstances where an independent investigation at least partially supported his allegations”.
TerraCom operates the Blair Athol coal mine in Queensland and also has assets in South Africa.
“ASIC took this case because whistleblowers shed light on important issues,” says ASIC deputy chair Sarah Court.
“Where corporations engage in conduct that harms whistleblowers, even unintentionally, they risk disincentivising others from coming forward.
“Companies should always properly consider and respond to the issues raised by whistleblowers.”
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