Asic wins in Padbury case

Padbury Mining and two of its directors have entered into a settlement agreement with the corporate watchdog over misleading statements made last year, but they could still face penalties in the Federal Court later this week.

The Australian Securities and Investments Commission alleged in court that Padbury, its managing director Gary Stokes and chairman Terence Quinn had been misleading when the company announced it had entered into a $6 billion funding agreement with a mystery backer last year, to fund construction of a port and rail network at Oakajee, north of Geraldton.

The announcement was made after the company had already entered into an agreement with the mystery backer, at which point Asic and the ASX lodged enquiries to Padbury concerning the deal, including disclosing the identity of the mystery investor, which was later revealed to be entities associated with Sydney-based hair regrowth entrepreneur Roland Bleyer.

Following the enquiries, Padbury announced that the funding agreement had been terminated.

In a statement today, Padbury said it, Mr Stokes and Mr Quinn had entered into a settlement deed with Asic, and had consented to the court making declarations that they had contravened sections of the Corporations Act 2001.

“Notwithstanding these consents, the making of any orders, including penalties, in these proceedings is at the discretion of the court,” Padbury said.

“It is anticipated that the court will make its orders after July 28 following a brief hearing.”

It is believed Messrs Stokes and Quinn will be fined and possibly banned from managing companies.

Padbury’s shares remain suspended from trade since the company requested voluntary suspension in December 2014.