TerraCom Limited will pay a penalty of $7.5 million for whistleblower victimisation, following Federal Court proceedings brought by the Australian Securities and Investments Commission (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.

TerraCom has also been ordered to pay ASIC’s legal costs of $1 million.