Dairy processor Murray Goulburn has agreed to a settlement with the Australian Securities and Investments Commission over ASIC’s investigation into the co-operative’s involvement in the milk price crisis.
The settlement is subject to Federal Court approval and ASIC will apply to the Federal Court seeking Murray Goulburn admit its wrongdoings as well as asking for a civil penalty of $650000, which the co-operative is expected to agree to.
The settlement relates to Murray Goulburn’s April 2016 announcement that it could not achieve $5.60/kg of milk solids and instead offered suppliers between $4.75 and $5/kg MS.
It is not alleged by ASIC that Murray Goulburn deliberately contravened its continuous disclosure obligations, but it is alleging Murray Goulburn was in contravention of section 674(2) of the Corporations Act 2001 between March 22 and April 27, 2016, due to failing to notify the ASX that circumstances had arisen, leading to a consequence that Murray Goulburn was unlikely to achieve its forecast.
Murray Goulburn chairman John Spark welcomed the end of ASIC’s investigation.
‘‘Murray Goulburn takes its disclosure obligations very seriously and has co-operated fully with ASIC during its investigation of these matters,’’ Mr Sparks said.
‘‘We consider that this settlement is in the best interests of Murray Goulburn as we continue to focus on our objective of supporting our farmer suppliers, including through the proposed Saputo sale process.’’
The matter is due to come before the Federal Court soon for the court’s approval of the settlement.
Under Section 674 of the Corporations Act 2001, companies are subject to continuous disclosure obligations.
ASX Listing Rule 3.1 says that once a listed entity is, or becomes, aware of any information concerning it, that a reasonable person would expect to have a material effect on the price or value of the entity’s securities, the entity must immediately tell ASX that information.
Companies which fail to make timely disclosure to the market face penalties of up to $1million per contravention.
The Australian Competition and Consumer Commission is also running an investigation into Murray Goulburn’s compliance with Australian consumer law.
The ACCC is alleging the company engaged in unconscionable conduct and made false or misleading representations in contravention of Australian consumer law.
The ACCC also alleges former managing director Gary Helou and former chief financial officer Bradley Hingle were knowingly concerned in Murray Goulburn’s conduct.
It is also conducting an inquiry into the competitiveness, trading practices, and transparency of the dairy industry.
The ACCC must submit its report to the Treasurer by April 30, 2018.