A former CEO is facing up to five years in jail and/or fines worth as much as $374,000 after being found guilty of misleading his company’s board and investors.
Andrew Ferguson, who was CEO of abalone farmer Australian Bight Abalone (ABA), was found guilty of 17 counts of providing false or misleading information to the company’s board of directors and prospective investors.
The information, which a jury found to have contained false or misleading details about the harvest prospects, survival rates of the abalone and company operations, was circulated to directors, would-be investors, customers and even the media during the ABA’s four years of operation, between 2005 and 2009.
During that time, ABA raised $44 million from 1,400 investors. The company was subsequently placed into administration in 2009 after failing to secure a sizeable harvest.
The trial in the District Court of South Australia heard from a significant number of witnesses, including former directors as well as divers, operations staff and marine biologists who worked for or with the company.
“Company officers are in a position of critical responsibility and trust, and it is expected that their behaviour is beyond reproach. This verdict sends an important signal that misleading investors will not be tolerated,” said acting ASIC chair Peter Kell.
Mr Ferguson had his bail revoked, and will be remanded in custody until sentencing on 18 April 2018.
Each of the charges carries a penalty of $22,000 or a combined jail time of five years.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.