Dairy giant Murray Goulburn was ordered by the Federal Court to pay a $650,000 fine, including Australian Securities and Investments Commission’s (ASIC) legal costs over the dairy giant’s disclosure failures ahead of last year’s profit downgrade.
According to AAP, ASIC took Murray Goulburn to the Federal Court for allegedly failing to notify the ASX that it was unlikely to achieve forecasts it made in February from March 22, 2016 to April 27, 2016.
“The penalty is towards the higher end of the statutory maximum but a penalty towards the higher end is warranted, reflecting the gravity of the contravention, the market impact and prejudice caused by the contravention, the involvement of the senior level of management in the contravention and failure of governance, and the inadequacy of MGRE’s compliance policies at the time and the duration of the contravention,” said Hon Justice Davies last Friday.
According to ASIC’s statement, Murray Goulburn was unlikely to achieve the following forecast stated by the company in their ASX announcements last 29 February 2016 entitled ‘Murray Goulburn – Half Year Financial Results News Release’ and ‘Murray Goulburn – Half Year Financial Results Presentation.’
- Available Weighted Average Southern Milk Region Farmgate Milk Price for the financial year ending 30 June 2016 of $5.60 per kilogram of milk solids; and
- Full-year net profit after tax for the financial year ending 30 June 2016 of approximately $63 million
ASIC will also issue to Murray Goulburn, in accordance with terms of settlement, an order to recover a contribution towards ASIC’s investigation expenses of $50,000 under s91 of the ASIC Act.
“If an entity has previously given a profit forecast to the market and that subsequently changes causing its profit forecast to differ from that guidance by a material amount, it is crucial to inform the market immediately in order that investors are apprised with up-to-date information,” ASIC commissioner Cathie Armour said.