A company which tried hard but failed to win the contract to build the new Spirit of Tasmania ferries is in legal strife over allegedly breaching federal laws.
The Australian Securities and Investments Commission has started civil Federal Court proceedings against Perth-based Austal Limited and former Austal chief executive David Singleton, alleging breaches of the Corporations Act and the ASIC Act.
ASIC said its proceedings involved "an alleged failure by Austal to immediately disclose to the market a material change in its prior earnings guidance".
"Austal had represented that it expected its US shipbuilding business would be profitable in financial year 2016, but subsequently became aware that it would likely generate a significant loss.
"ASIC alleges that Austal breached its continuous disclosure obligations under s674(2) of the (Corporations) Act between June 6 and July 4, 2016 by failing to disclose that a writeback of at least $US90 million was likely required and that this would generate a significant loss.
"ASIC also alleges that Austal engaged in misleading or deceptive conduct in breach of s1041H(1) of the (Corporations) Act and/or s12DA of the ASIC Act by failing to correct or withdraw its previous guidance.
"ASIC alleges Mr Singleton, Austal's CEO at the time of the alleged misconduct, contravened sections 180(1) and 674(2A) of the act for his involvement in Austal's continuous disclosure contravention and by failing to exercise reasonable care and diligence as a director of Austal."
ASIC is seeking declarations and monetary penalties from the Federal Court.
Austal said it would consider the documentation provided by ASIC before deciding its next steps.
The company said it would will keep shareholders advised of all material developments related to the proceedings.
Austal's bid to build the new Spirits emerged in August last year after the state government walked away from a previous plan to have the ships built by Finnish shipbuilder Rauma Marine Constructions.
The government basically took the build back to the market, saying it wanted to maximise involvement for Tasmanian and Australian companies.
Austal's bid and lobbying efforts made much of its intended use of local content, although the hulls would still have been built overseas.
Austal was aided by prominent Tasmanian public relations firm Font PR, which employs several former senior state government staffers.
Southern catamaran builder Incat was also keen on winning the lucrative contract.
The government in March ultimately chose to stick with TT-Line's original recommendation, the Finnish company.
Premier Peter Gutwein in April said negotiations with Rauma led to the inclusion of up to $100 million of local content in the build.
The price is expected to be $855 million.