The Australian Competition & Consumer Commission’s high profile case alleging cartel conduct and bid rigging for mining exploration licences in NSW was dismissed by the Federal Court on Friday, but the reasons for dismissal may not be known for another year.
On Friday, Justice Lindsay Foster delivered the bare bones of his judgment, saying only that the ACCC’s application had been dismissed, before a lawyer for Moses Obeid, owner of some of the companies involved in the alleged cartel conduct, interrupted, calling for a suppression order on the judge’s reasoning.
With Obeid facing pending criminal proceedings in the NSW Supreme Court, a suppression order was necessary to avoid prejudice, his barrister Abbas Soukie said.
Obeid, as well as his father, Eddie Obeid, and Ian McDonald, both former NSW Labor Ministers, face conspiracy charges for their role in the 2009 tender process. Next year’s trial is expected to last for six months, beginning in May.
The judge also gave the ACCC extra time to appeal the ruling. The regulator has until August 3.
The commission filed its originating application commencing proceedings in May 2015, claiming Cascade Coal and Loyal Coal entered into an agreement with each other in the 2009 tender process for exploration licences over the Mount Penny and Glendon Brook coal tenements in the Bylong Valley, NSW.
The regulator alleges that Loyal Coal, which was majority owned by Moses and Paul Obeid, agreed to withdraw from the tender process in return for Cascade granting one of Loyal’s affiliate companies, Buffalo, a 25% interest in its mining venture. Cascade also promised to purchase land in the coal release area from owners who were represented by the Obeids for four times the lands’ value.
Cascade ended up winning the tender for both coal release areas.
The ACCC also claims that in 2010, Buffalo transferred its 25% ownership to Southeast Investments, also associated with the Obeids. Southeast later sold the interest to Coal & Minerals Group, a firm associated with Cascade. As a result of these transactions, Southeast Investments received benefits worth $60 million, including $30 million in cash which was distributed to Paul and Moses Obeid, one of their family trusts, and their families.
In April 2016, Loyal admitted to breaching competition law and resolved the court proceedings. The settlement amount remains confidential.
The ACCC is also pursuing proceedings against John McGuigan, director of Cascade; Richard Poole, a former director of Cascade; and James McGuigan, a representative of Cascade, as well as Locaway, Mincorp Investments, and Southeast Investment Group, companies that are all associated with the Obeids.
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