Fortescue hit with insolvent trading allegations

Liquidator for former contractor to probe iron ore miner over claims.

A liquidator will question senior Fortescue Metals Group Ltd executives over allegations of trading while insolvent, The Australian reports.

According to the newspaper, the allegations relate to the period last year when Fortescue's shares were affected by the falling iron ore price, which it is claimed saw the miner terminate an $8 million contract with Fuel-Sys Installations.

Lawyers for FSI's liquidator have written to the Fortescue board claiming to have witnesses to a Fortescue executive saying the miner could not make payments on a fuel facility project in the Pilbara.

The Australian reports FSI alleges the claims the comments were made when Fortescue was probably insolvent.

Representatives for Fortescue have denied the allegations.

"We categorically deny the allegation that we unilaterally altered our credit terms to any of our contractors and suppliers in response to iron ore market volatility," a Fortescue spokesman said.

"We have acted with integrity in this matter and in fact believe that we have behaved as a white knight," he said.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles