Third court victory for Fortescue Metals boss

Australia's corporate regulator is licking its wounds and Fortescue Metals Group founder Andrew Forrest is celebrating after ASIC's third failed trial in just over a month.

The trial could have led to the billionaire's banishment as a company director after the Australian Securities and Investments Commission alleged misleading and deceptive conduct by FMG and Mr Forrest.

But the Federal Court in Perth threw out the allegations and ordered ASIC to pay all the defendants' costs after a five-week trial involving up to 20 lawyers, including several QCs on both sides.

The corporate watchdog had accused the iron ore miner and its founding director of overstating the nature of so-called binding agreements with Chinese parties in announcements to the markets in late 2004 and early 2005.

Fortescue and Mr Forrest said the "build and transfer framework agreements" between the firm and Chinese government companies for port and rail infrastructure had been legally binding arrangements.

Their lawyers told the court that a March 2005 article in the Australian Financial Review, which forced Fortescue to concede a deal with China Metallurgical Construction Corporation had collapsed, came as "a complete bombshell".

Fortescue later conceded to the markets that its deals were "framework agreements" which were effectively agreements to talk further.

The company maintained its actions had been honest and reasonable in the circumstances, as both it and Mr Forrest believed the agreements were legally binding.

If found guilty, FMG and Mr Forrest had faced maximum civil penalties of A$6 million and A$4.4m (NZ$7.5m and $5.5m) respectively, while Mr Forrest could have been banned as a company director.

Mr Forrest, who did not appear in court for the judgment, issued a statement saying he was "very pleased" with a ruling that had "vindicated the decision to defend ASIC's claims against Fortescue Metals Group and me".

"I'd like to take this opportunity to thank God, thank the Australian judicial system, and most of all my family and friends for their unswerving support throughout the proceedings," he said.

- AAP