Former Australian Mines managing director, Benjamin Bell, has been fined $70,000 and disqualified from managing corporations for two years for breaching his duties as a director.
The Federal Court decision comes after Mr Bell admitted he failed to act with the degree of care and diligence required of a director when he gave presentations at investment conferences in Hong Kong and London and:
falsely claimed that Australian Mines had secured funding to construct a plant for its main asset, the Sconi Project and
misleadingly stated that the value of the offtake agreement with SK Innovation, based on expected production from the Sconi Project, was $5 billion despite the agreement including a potential buyers discount of 15%.
Mr Bell admitted that by making these comments he caused Australian Mines to breach its continuous disclosure obligations.
ASIC Deputy Chair Sarah Court said, ‘As managing director of Australian Mines, Mr Bell had an obligation to provide accurate information about his company’s dealings and make sure it complied with continuous disclosure laws.
‘Continuous disclosure obligations are fundamental principles of fairness and transparency that sit at the heart of Australia’s financial markets. When directors fail in their obligations, they undermine these core principles and ASIC will look to take action,’ concluded Ms Court.
The Federal Court further found, by stating that the value of the Australian Mines’ Offtake Agreement was $5 billion, Mr Bell admitted that:
he ought reasonably to have known that following inquiries by the ASX, Australian Mines had recently retracted the same valuation as it was not consistent with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code);
he failed to take reasonable steps to ensure that repeating the valuation on two occasions would not result in further inquiries by the ASX and Australian Mines having to again issue a retraction as the valuation was not consistent with the JORC Code; and
he failed to cause Australian Mines to correct the representation or to inform the ASX of other information required by the JORC Code.
In handing down the penalty, Justice Colvin found Mr Bell’s contraventions to be serious and noted that capital markets are dependent on accurate information being available.
Benjamin Bell has been ordered to contribute to ASIC’s legal costs in the amount of $60,000. Mr Bell’s disqualification commences on 12 May 2023.