Padbury Mining, its chief executive officer Garry Stokes and chairman Terry Quinn have all admitted breaching the Corporations Act as part of the company's botched $6.8 billion refinancing deal with hair growth entrepreneur Roland Bleyer.
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The admissions came after dispute resolution process earlier this year.
Mr Quinn and Mr Stokes now face bans as company directors as well as fines. A hearing regarding penalties will take place on Thursday in Perth.
The Australian Securities and Investments Commission took action against the directors and company in 2015 after an investigation into the company's debt raising announcements.
Both Mr Stokes and Mr Quinn have admitted breaching their continuous disclosure obligations regarding the announcement to the market that Padbury had obtained financing to fund the construction of the Oakajee port in Western Australia in 2014.
They have also admitted breaching the care and diligence requirements for company directors.
The company today made an announcement on the Australian Stock Exchange following inquiries from Fairfax Media over the past two weeks regarding the matter.
Earlier on Wednesday the Federal Court declined to release generally unrestricted documents to Fairfax Media citing commercial confidentiality.
Ahead of the Oakajee announcement in April 2014, Padbury had been having significant trouble in securing a backer for the project.
Padbury surprised the market when it announced it had struck a deal with private investors to stump up funding for the port and rail project.
Padbury's share price soared as much as 170 per cent on the day of the announcement.
However it all became unstuck after the company was forced to reveal that the company behind the funding was linked to Mr Bleyer - a man with a colourful business history both in Australia and in the United States.
Mr Bleyer has been involved in several civil cases and some criminal actions, including beating drug possession charges in California, and has made claims he helped the Greek government in its debt crisis negotiations and ran a bank in Azerbaijan that collapsed in 2012.
Investors pulled out of Padbury after Mr Bleyer's support of the deal was made public with many believing the deal would not come to fruition. Two years later and Padbury is still trying to raise money to build the Oakajee project after the Bleyer deal fell over.
Mr Bleyer was never accused by ASIC of breaching the Corporations Act.
