The Federal Court today dismissed an application by Moses Obeid for leave to appeal the Court’s earlier refusal to grant a suppression order over part of its reasons in an alleged bid rigging case brought by the ACCC.
On 6 July 2018 the Federal Court dismissed proceedings brought by the ACCC against 11 respondents for alleged bid-rigging conduct. These proceedings related to the 2009 tender process conducted by the then NSW Department of Primary Industries for exploration licences over the Mount Penny and Glendon Brook coal tenements in the Bylong Valley. One respondent, Loyal Coal Pty Ltd (Loyal), admitted liability before the trial took place.
The ACCC filed an appeal from that judgment on 3 August 2018. This appeal is yet to be to be heard.
On 6 July 2018 Moses Obeid also sought a suppression order over part of the Court’s reasons.
This application was refused by the Court but in the meantime part of the reasons have remained the subject of interim suppression orders pending resolution of an application by Moses Obeid for leave to appeal that decision.
The decision of the Court today means that the judgment of 6 July 2018 is no longer subject to any suppression order.
The ACCC’s investigation followed the report by the NSW Independent Commission Against Corruption (ICAC) in its Operation Jasper investigation concerning the same tender process.
The ACCC alleged that Cascade had entered into a contract, arrangement or understanding with Loyal, three of its affiliated companies and United Pastoral Group for Loyal to withdraw from the NSW Government’s tender process for the Mount Penny and Glendon Brook mines.
As part of the arrangement, Cascade would then grant one of the Loyal affiliated companies, Buffalo Resources, a 25 per cent interest in the Mount Penny coal release area and agree to buy the properties of some landowners, who were represented by Paul and Moses Obeid, at four times the land value, and to take over their mortgage obligations.
Loyal subsequently withdrew its bid, and Cascade won the tender for the Mount Penny and Glendon Brook coal release areas.
The ACCC also alleged that in 2010, Buffalo Resources transferred ownership of the 25 per cent interest to another company, Southeast Investment Group, which later sold the interest back to an entity affiliated with Cascade and controlled by Richard Poole.
As a result of the sale, Southeast Investments accepted $60 million in benefits, including approximately $30 million in cash payments, which was distributed to beneficiaries of the Obeid Family Trust No. 2, including Paul and Moses Obeid and their immediate families.
The ACCC instituted proceedings in May 2015 against 11 respondents as follows:
- Cascade Coal Pty Ltd (Cascade) and an associated company, Coal & Minerals Group (CMG), and the following individuals:
- John McGuigan, director of Cascade;
- Richard Poole, a former director of Cascade;
- James McGuigan, a representative of Cascade;
- Moses and Paul Obeid;
- Companies associated with Moses and Paul Obeid, namely:
- Loyal Coal Pty Ltd (Loyal);
- Locaway Pty Ltd (Locaway);
- Mincorp Investments Pty Ltd, formerly Voope Pty Ltd (Voope); and
- Southeast Investment Group Pty Ltd (Southeast Investments).
In April 2016, Loyal admitted to bid rigging in breach of the cartel laws, and agreed to resolve the ACCC’s proceedings brought against it. That settlement has yet to be finalised by the Court.
The hearing took place from 4 April 2016 to 28 April 2016. Judgment was delivered on 6 July 2018.
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