MURRAY GOULBURN TO PAY $650K SETTLEMENT

MURRAY GOULBURN TO PAY $650K SETTLEMENT

LISTED dairy co-op Murray Goulburn (ASX: MGC) has agreed to pay a $650,000 settlement and admitted to breaching its continuous disclosure obligations.

The troubled dairy company says the Australian Securities and Investments Commission (ASIC) will apply to the Federal Court seeking a declaration of one breach under the Corporations Act, with no suggestion of intent.

"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," says Murray Goulburn chairman John Spark.

The breach of obligations arises from 29 February 2016 when Murray Goulburn released announcements to the ASX forecasting average milk price for FY16 of $5.60 per kgms, and a full year profit expectation of $63 million.

ASIC alleges that the milk co-op contravened disclosure obligations by failing to notify the ASX of circumstances on the 22 March 2016, a consequence of which was that Murray Goulburn was unlikely to achieve its forecast profits.

At the time, the milk group slashed its profit forecast by as much as 40 per cent and announced retrospective price cuts on its milk payments to farmers.

Murray Goulburn said it expected a net profit after tax of between $39 million and $42 million, just months after forecasting the $63 million net profit.

Murray Goulburn has admitted to the ASIC allegations.

ASIC Commissioner Cathie Armour says listed companies need to be thorough with their forecast expectations.

"Listed entities must inform the market immediately when they become aware of circumstances that mean there will be material differences in market expectations of its earnings," says Armour.

After the announcement in 2016, shares in the milk co-op plunged, with suppliers thrown into turmoil. In the 18 months since, suppliers have left the dairy processor and the amount of milk it produces has plummeted.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Crypto staking: a new way to earn passive income
Partner Content
You may be familiar with traditional ways of earning passive income such as trading sto...
Etoro
Advertisement

Related Stories

Blackstone waits on gaming authorities as Crown shareholders approve $8.9b buyout

Blackstone waits on gaming authorities as Crown shareholders approve $8.9b buyout

Shareholders of Crown Resorts (ASX: CWN) have voted in favour of th...

Carsales.com founders sell Melbourne office development for $60.25m

Carsales.com founders sell Melbourne office development for $60.25m

A Singapore-listed property trust managed by Frasers Property (SGX:...

Woolworths adds controlling stake in MyDeal to cart for $218 million

Woolworths adds controlling stake in MyDeal to cart for $218 million

Woolworths (ASX: WOW) is looking to enhance its online marketplace ...

Bendigo-based Apiam Animal Health saddles up with $13.8m acquisitions

Bendigo-based Apiam Animal Health saddles up with $13.8m acquisitions

Vet services business Apiam Animal Health (ASX: AHX) has gone ...