Murray Goulburn’s $650,000 penalty confirmed

18 Dec, 2017 01:40 PM
Comments
0
 

Big dairy co-operative Murray Goulburn has had its recent $650,000 fine confirmed by the Federal Court.

MG, currently in the throes of selling off its entire processing and marketing operation, including the successful Devondale brand, must pay up after admitting to the Australian Securities and Investments Commission (ASIC) it breached continuous disclosure obligations to shareholders last year.

The penalty was a consequence of its behaviour leading up to last year's dramatic 40 per cent profit downgrade and subsequent retrospective farmgate milk price cut to its farmer suppliers, which triggered an earnings crash for farmers across southern Australia.

ASIC brought Federal Court proceedings alleging between March 22, 2016 to April 27 MG failed to notify the Australian Securities Exchange it was unlikely to achieve forecasts it had made in February.

In its April update to the ASX ,MG revealed a new after-tax profit forecast of $39m to $42m, well down from the $63m predicted in February 2016.

Both profit forecasts followed its 2015 partial stock market float forecast of an $89m profit.

MG Trust shares dived with news and are currently worth 81 cents each – down from their $2.70 peak two years ago.

Last month, as part of a settlement with ASIC, MG agreed it had breached its obligations once.

ASIC did not allege MG had deliberately contravened its continuous disclosure obligations.

The maximum penalty for a breach could have been $1 million, which was why the court was left to determine the final amount of the penalty.

MG, and its former chief executive Gary Helou, still face an Australian Competition and Consumer Commission (ACCC) prosecution for alleged unconscionable conduct.

The ACCC alleged MG knew for many months leading up to the April update it would fail to meet its forecasts, but MG is disputing the claims.

Andrew Marshall

Andrew Marshall

is the national agribusiness writer for Fairfax Agricultural Media

POST A COMMENT


Screen name *
Email address *
Remember me?
Comment *
 
A new definition of 'genetically modified' currently awaiting parliamentary approval could see a swathe of new grasses on the market within three years.
13 Nov 18 A new definition of "genetically modified" currently awaiting parliamentary approval could see a swathe of new...
A person normally breathes about 25,000 times a day, with the lungs taking in oxygen from the air and delivering it to the bloodstream.02 Nov 18 A person normally breathes about 25,000 times a day, with the lungs taking in oxygen from the air and delivering it...
light grey arrow
This is all very nice for specific LIon suppliers but it does absolutely nothig for the wider
light grey arrow
This is well-written, covers what's going on well. It highlights how wrong the processors
light grey arrow
Such nonsense. But, what does one expect from such a biased source - a dairy industry spokesperson.
Australian Dairyfarmer's Jeanette Severs checked out the range of new and interesting products and services on show at the South Gippsland Dairy Expo in September, while Peter Roach caught up with suppliers at the Elmore Field Days in October.02 Dec 18 Australian Dairyfarmer's Jeanette Severs checked out the range of new and interesting products and services on show...
The floodplain around Kerang and Swan Hill in north-west Victoria is dotted with depressions and surrounding windblown lunettes.29 Nov 18 The floodplain around Kerang and Swan Hill in north-west Victoria is dotted with depressions and surrounding...
Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition opportunities.25 Sep 16 Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition...
Monopoly market may confront cropping sector under mega-merger proposal.22 Sep 16 Monopoly market may confront cropping sector under mega-merger proposal.