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Austal to pay penalty for regulatory breach

Austal to pay penalty for regulatory breach

The shipbuilding giant has reached a settlement with Australia’s corporate regulator following an alleged breach of shareholder reporting obligations.

The shipbuilding giant has reached a settlement with Australia’s corporate regulator following an alleged breach of shareholder reporting obligations.

Austal Limited has agreed to a $650,000 settlement with the Australian Securities and Investments Commission (ASIC), which has accused the shipbuilder of failing to meet market disclosure requirements relating to its Littoral Combat Ship (LCS) program prior to 4 July 2016.

Following an investigation, ASIC has moved to apply to the Federal Court seeking a declaration of one contravention of the continuous disclosure provisions of the Corporations Act 2001 (Cth) for the period 16 June 2016 to 3 July 2016.

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“Austal takes it disclosure obligations very seriously,” Austal chairman John Rothwell said.  

“We have rigorous processes and procedures in place to ensure that those obligations are complied with at all times.

“Austal has cooperated with ASIC’s investigation and reached agreement with ASIC on how its investigation should be resolved.”

Rothwell conceded the settlement is in the company’s “best interests”, adding Austal would now revert its focus to the development of its global shipbuilding business.

The settlement is pending approval from the Federal Court.

The penalty comes amid a flurry of unrelated work awarded to Austal over recent months. 

In June, Austal Limited announced it was awarded three contracts with a total value of $300 million in support of projects for the Royal Australian Navy (RAN), US Navy, and the Trinidad and Tobago Coast Guard.

Specifically, the company was tasked with:

  • constructing an additional two evolved Cape class patrol boats (ECCPBs) for the RAN as per the former Morrison government’s announcement in April;
  • undertaking the detailed design and construction (DD&C) of the United States Navy’s new Auxiliary Floating Dry Dock Medium (AFDM); and
  • the in-country sustainment of two Cape class patrol boats built for the government of the Republic of Trinidad and Tobago (Trinidad and Tobago Coast Guard).

The $110 million contract to deliver two additional ECCPBs for the RAN builds on a $324 million deal to construct six vessels, taking the total number of boats to eight.

The US deal involves developing an AFDM with a lifting capacity of over 18,000 tonnes, a length of 211 metres and working area of nearly 8,500 square metres.

The dry dock is expected to have the capability to service large vessels such as LCS vessels, guided missile destroyers, guided missile cruisers and landing ship docks.

Meanwhile, Austal’s work on Trinidad and Tobago Coast Guard’s patrol boats, TTS Port of Spain (CG41) and TTS Scarborough (CG42), will span across two years to at least 2024.

[Related: Austal secures $300m in shipbuilding work]

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