Murray River Organics cops fine for alleged disclosure breach
Health & Biotech
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Murray River Organics Group has paid a $33,000 fine to the corporate regulator for an alleged failure to comply with continuous disclosure obligations.
In a statement to shareholders, Murray River said: “The company considers that it complied with its continuous disclosure obligations in the period leading up to its trading update on 4 May 2017. However, the company has agreed to pay the $33,000 penalty to conclude [corporate regulator] ASIC’s investigation and to avoid additional costs.”
On Monday ASIC provided details of the allegations, which centred around an announcement on May 4 that earnings expectations for the 2017 financial year were materially below forecasts made in its prospectus the year before due to seasonal factors.
In May, Murray River (ASX:MRG) was forced to downgrade its revenue by $10 million, EBITDA by $12.5 million to $13.5 million and net profit by $4.2 million to $4.9 million.
“ASIC alleges that, by 26 April 2017, Murray River Organics was aware that its revenue, EBITDA and PBT for the 2017 financial year were likely to be materially below the forecasts contained in its prospectus, although the extent of the divergence was uncertain as at that date,” the regulator said in a statement.
ASIC sent Murray River an infringement notice, but pointed out that compliance isn’t an admission of guilt or liability.
Murray River has been under pressure since it listed last year, but particularly since its two founders, Jamie Nemtsas and Erling Sorensen, quit in August and November respectively.
They then voted their collective 20.4 million shares against all resolutions at the AGM, defeating all but one resolution – including those Mr Sorenson had put forward while he was still CEO.