Newcrest hit with $1.2m fine by ASIC

ASIC has fined Newcrest Mining $1.2 million for breaching continuous disclosure obligations in 2013. Source: AAP

GOLD miner Newcrest Mining has been fined $1.2 million in Australia's largest ever penalty for selectively providing market sensitive information.

NEWCREST, the nation's largest gold miner, admitted withholding the information from the wider investment market for at least a week in 2013.

In a settlement with the Australian Securities and Investments Commission (ASIC), it admitted to two contraventions of continuous disclosure rules, which dictate companies make available any information than can impact its share price.The Federal Court will now decide whether to approve the settlement.It is more than double the country's previous largest disclosure rules penalty of $500,000, and only the fifth such litigation by ASIC in a decade.The Newcrest penalty relates to selective briefings given by the company's then investor relations manager Spencer Cole to analysts from investment banks, alerting them to large cuts in gold production and capital expenditure.That sparked a suspicious raft of broker downgrades of the stock, and a 15 per cent slump in Newcrest's share price in the three days before the market was informed of production and spending cuts.Newcrest also announced on June 7 more than $6 billion in impairments, partly related to its struggling PNG operations at Lihir.ASIC said Newcrest's selective disclosures had generated confusion, speculation, media attention and a loss of confidence in market integrity and the company's shares.Anyone who traded in Newcrest shares between May 28 and June 7 when analysts were informed and the public was not had been materially prejudiced, it said.ASIC acknowledged Newcrest's budgeting process at the time was difficult, with its cash flow under threat in the wake of gold's most dramatic price fall in 30 years.Commercial law expert Ian Ramsay, from the University of Melbourne law school, described the judgment as rare and significant.While Newcrest has not admitted knowingly or intentionally breaching its corporate obligations, it has still admitted liability, he said."What's got ASIC excited is not just the fact that Newcrest is one of the world's biggest mining companies, it is the seriousness of it," Professor Ramsay told AAP."He (Mr Cole) wasn't off on a frolic, it looks as though what he was doing was run past senior management."Newcrest may now also want to settle a shareholder class action related to its announcement of writedowns and the resulting share price falls.Slater & Gordon lawyers, representing Newcrest shareholders, are reviewing the ASIC settlement.Newcrest chairman Peter Hay said the company regretted the contraventions, and pointed out it had since revised and tightened its governance structure.Newcrest shares were up 20 cents to $10.17 at 1530 AEST.

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