TerraCom has been ordered to pay $7.5 million for victimising a whistleblower, marking the Australian Securities and Investments Commission’s (ASIC) first enforcement outcome under whistleblower protection provisions.
TerraCom Fined $7.5 Million in ASIC Whistleblower Case
The case centred on two ASX announcements made by TerraCom in February and April 2020, along with an open letter published in the Australian Financial Review and The Australian in March 2020.
In these communications, the company claimed that allegations made by a whistleblower were false and that its employees had been independently cleared.
TerraCom later admitted the statements harmed the whistleblower by causing “hurt, humiliation, distress and embarrassment” and by damaging his reputation.
ASIC said the company had wrongly represented him as someone making baseless accusations for personal gain, despite an independent investigation partially supporting his claims.
ASIC Deputy Chair Sarah Court said the outcome sent a strong message. “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,” she said.
In addition to the $7.5 million penalty, TerraCom was ordered to pay ASIC’s legal costs of $1 million.
The Federal Court proceedings followed a long-running dispute over a PricewaterhouseCoopers report commissioned by TerraCom into the allegations.
After several legal challenges, ASIC obtained access to the report in 2022. Civil penalty proceedings against four former TerraCom executives were dismissed last month.
