The state watchdog last week found that former mines minister Ian Macdonald acted corruptly in awarding the licence to political ally Eddie Obeid.

ICAC also recommended that White Energy chairman Travers Duncan be charged with fraud and breach of directors' duties, and that non-executive director and substantial shareholder John Kinghorn face breach-of-director-duties charges.

Kinghorn and Duncan were directors and shareholders of Cascade Coal, which held the exploration licence that was allegedly corruptly granted for Mt Penny.

ICAC said Duncan intentionally misled public officials about the involvement of Obeid and his family in Mt Penny and said Kinghorn engaged in corrupt conduct by failing to disclose Obeid’s involvement.

The findings have been referred to the NSW Director of Public Prosecutions for possible fraud offences under the Crimes Act and to the commonwealth DPP for prosecution under the Corporations Act.

ASA is calling on both Kinghorn and Duncan to stand down from the coal junior’s board until the allegations are resolved.

“ASA recognises that individuals are entitled to their day in court, but given the seriousness of the allegations, we believe the adversely named White Energy directors should stand aside for new directors who can concentrate on steering the company through a difficult period ahead,” ASA chairman Ian Curry said in a release.

“It is also very important that the White Energy board is controlled by directors who are prepared to fully co-operate with relevant authorities.

“In light of the evidence presented to ICAC, ASA would support independent director Graham Cubbin taking over as White Energy chair and also leading the board renewal process.”

In a statement to the Australian Securities Exchange Thursday, White Energy said it acted “correctly and in accordance with established protocol” in relation to the acquisition.

The company attached a letter written by Duncan to the board in which he said he "strongly rejected" ICAC's findings and was investigating legal options.

“I strongly reject these conclusions of the commission,” he wrote.

“They are without any factual foundation, constitute errors of law by the commission and were arrived at following a process which did not involve the level of independence, rigor and protection of individuals’ rights required by a court of law.”

Kinghorn has also rejected ICAC’s findings, but has said he will cooperate fully with any investigation.