Failure to Report
The defendant companies are part of the Australian group of subsidiaries of the Barrick Gold Corporation, registered in Canada. The Barrick Group represents significant resources and at the time was the second largest gold producer in the world. There are a large number of subsidiary companies within the Australian group’s structure.
The defendant companies (8 different Barrick companies) were charged with 14 counts of failing to lodge an annual report with the Australian Securities and Investment Commission (ASIC) pursuant to section 319(1) and 1 count of failing to comply with a court order pursuant to section 1274(13) Corporation Act 2001. Each of the defendants was charged, pleaded guilty and were sentenced separately as follows:
Charge & maximum applicable penalty
|Barrick (Cowal) Ltd||1 x s 319(1) - $13,750||Fined $8,000|
|Barrick (Plutonic) Ltd||1 x s 319(1) - $13,750||Fined $8,000|
|Barrick (Lawlers) NL||1 x s 319(1) - $13,750||Fined $8,000|
|Barrick (Darlot) NL||1 x s 319(1) - $13,750||Fined $8,000|
|Barrick (Australia Pacific) Ltd||3 x s 319(1) - $13,750||Fined $8,000 per offence|
|Barrick Mining Company (Australia)||2 x s 319(1) - $13,750||Fined $8,000 per offence|
|Grants Patch Mining Ltd||1 x s 319(1) - $13,750||Fined $8,000|
|Barrick (PD) Australia Ltd||4 x s 319(1) - $13,750||Fined $8,000 per offence|
|1 x s 1274(13) - $27, 500||Fined $15,000|
In sentencing the defendant companies, the court held that the only significant mitigating factor was the early pleas of guilty from each defendant. It was also noted that several sets of annual reports to which charges related had been lodged prior to sentencing (but after prosecution commenced). Several reports remained outstanding at the time of sentence.
The court accepted that the principal objective of the company reporting obligations in the Corporations Act is to ensure that creditors, investors, shareholders and the public have access to accurate and up-to-date information about the financial position of companies so that they can make informed decisions when dealing with such companies. When a company fails to file annual reports with ASIC, it impacts on the efficiency of the market as a whole, by denying the opportunity for fully informed investment and contractual decisions. ASIC, as the corporate regulator, is also denied the opportunity to promptly identify irregularities in a company’s affairs.
The court noted that the defendant companies had the financial capacity to comply but were tardy in their approach to doing so.