NSW Parliament's standing committee on law and justice accepted that some of NuCoal's 3400 shareholders are "innocent parties", but rejected a plan to pass legislation that would leave compensation up to an independent arbiter and potentially expose NSW taxpayers to unknown liabilities.

The committee left it open to the NSW Government to "address the outstanding matters raised during this inquiry, where appropriate, including the issue of compensation for innocent shareholders" following an inquiry in August. A final report was released in late October.

But NuCoal directors who lost millions of dollars in share values when the corrupted Doyles Creek Mine exploration licence was cancelled in 2014 failed to persuade the committee they were "innocent parties" entitled to compensation.

The directors were either aware, or should have been aware, by June, 2009 of public controversy about how the licence was granted before they invested in Doyles Creek Mining shares, which exchanged for NuCoal shares in February, 2010 when NuCoal was listed on the Australian Stock Exchange, the inquiry found.

NuCoal's share price went from a high of 62 cents in January 2011, to 35 cents when an Independent Commission Against Corruption inquiry into the granting of the exploration licence was announced in October 2011, and fell to 7-8 cents when ICAC made corruption findings in August, 2013.

The share price was just 2 cents when NSW Parliament cancelled the exploration licence in January, 2014.

The committee quoted evidence by NuCoal director Glen Lewis to the 2013 ICAC inquiry in which he agreed any investment after March, 2010 was made "under the shadow of the controversy concerning the circumstance of the grant of the exploration licence".

The parliamentary committee found NuCoal's share price was adversely affected at numerous stages by public controversy following the granting of the exploration licence and the subsequent ICAC inquiry.

"The volatility in the share price reflected an appraisal by the market of the relative risk posed by the controversy at critical stages. We do not rule out the existence of shareholders who purchased in good faith without any knowledge of the controversy," the committee said.

It recognised that any innocent stakeholders among the 3400 NuCoal shareholders "sustained significant financial loss, with impacts extending to their emotional and psychological well-being".

But while it acknowledged there might be "innocent shareholders", the committee said it was not clear how issues such as who could be compensated, and at what price, could be answered.

"On the evidence before us, we could not draw a firm conclusion on how to determine any such class of shareholders."

Case studies included a couple who invested in mining ventures through their self-managed superannuation fund. They bought 50,000 NuCoal shares in June, 2010 for 22 cents each, remained convinced through the ICAC inquiry that NuCoal had no case to answer, and increased their shareholding to 100,000 shares in late 2013, after the inquiry found corrupt conduct in the granting of the Doyles Creek exploration licence.

The committee said the couple bought speculatively because they believed the licence was "appropriately delivered", and still held their shares while continuing to "hope for justice".

The committee rejected legislation proposed by Christian Democrat Party leader Fred Nile to leave decisions on compensation to an independent arbiter such as a retired judge.

"It is inappropriate for the Bill in its current form to proceed without a clear understanding of the extent of the liability this may create for the Government and the people of NSW," the committee said.

It noted US investors who lost money from NuCoal shareholdings were the subject of ongoing discussions between the Australian Government and the US Trade Representative.

While there had been a lot of publicity about the NuCoal case, there were other cancelled exploration licences in NSW where shareholders had not been compensated, the committee said.

"In addressing the outstanding matters raised during this inquiry, the committee encourages the NSW Government to also consider the affected stakeholders of these other cancelled exploration licences," it said.