It was the first time Australian Securities and Investment Commission had taken action for alleged breaches of whistleblower provisions.

The issue has been dogging Terracom for several years and relates to claims by former employee Justin Williams who took the company to the Fair Work Commission after his employment was terminated. In that case, Williams claimed the company had falsified results.

ASIC alleges that Terracom and its senior company employees engaged in conduct that harmed a whistleblower who revealed the alleged falsification of coal quality certificates, deputy chair Sarah Court said.

“Whistleblowers perform a vital role in identifying and calling out corporate misconduct.

“We take any indication that companies are engaging in conduct that harms or deters whistleblowers very seriously.”

ASIC also cited two announcements made by Terraciom and an open letter published in newspapers which denied the allegations of falsification and said the claims had been independently investigated.

ASIC alleged the then-chief commercial officer Nathan Boom, chair Wal King, managing director Danny McCarthy and director Craig Ransley failed to take reasonable steps to ensure statements made to the ASX were not false or misleading.

“ASIC also alleges that by allowing false or misleading statements to be published, Terracom, McCarthy, Boom and Ransley engaged in conduct that caused detriment to the whistleblower’s reputation, earning capacity and psychological and emotional state,” ASIC said.

“Further, ASIC alleges McCarthy, Boom, King and Ransley failed to take reasonable steps upon receipt of the independent investigator’s report into the issues raised by the whistleblower, in breach of their duty to exercise reasonable care and skill in the discharge of their duties as directors and officers of Terracom.”

That independent report, by PwC, labelled Project Rex, was obtained by ASIC after it issued a search warrant on Terracom’s Blair Athol office, however, Terracom started legal proceedings to prevent ASIC from reviewing the report.

The Federal Court later ordered the company to provide a copy of the report with redactions. The court’s decision followed TerraCom failing at first instance on maintaining its claim for privilege over the PwC report, with a decision that TerraCom had waived privilege over the entire report by way of the company’s public disclosures about it.

Terracom said it would vigorously defend the charges.