TerraCom Limited (TerraCom) will pay a penalty of $7.5 million for whistleblower victimisation, following Federal Court proceedings brought by ASIC. This is ASIC's first enforcement outcome for contraventions of whistleblower provisions.
ASIC's case concerned two ASX announcements made by TerraCom on 14 February 2020 and 3 April 2020, and an open letter it published to shareholders in the Australian Financial Review and The Australian on 12 March 2020. The announcements and open letter stated that allegations made by the whistleblower were false, and that TerraCom had the conduct of its employees independently investigated.
TerraCom admitted that those announcements caused detriment to the whistleblower in the form of hurt, humiliation, distress and embarrassment. It admitted they 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.
ASIC Deputy Chair Sarah Court said, 'ASIC took this case because whistleblowers shed light on important issues. 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.'
TerraCom has also been ordered to pay ASIC's legal costs of $1 million.
