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20-279MR Former Murray Goulburn executives disqualified for involvement in continuous disclosure breaches
Former Murray Goulburn managing director Gary Helou and former chief financial officer Bradley Hingle have been disqualified from managing corporations by the Federal Court, following an ASIC investigation.
The Court ordered the disqualification of Mr Helou and Mr Hingle for three years and two years respectively following their involvement in Murray Goulburn Co-operative Co. Ltd (MG) and MG Responsible Entity Ltd’s (MGRE) continuous disclosure contraventions in 2016.
The Court found that Mr Helou and Mr Hingle contravened sections 674(2A) and 675(2A) of the Corporations Act 2001 (Cth) (Corporations Act) on various occasions on and from 8 March 2016 until 27 April 2016 by being knowingly concerned in the failure of MGRE and MG to disclose that:
- there was likely to be a material decrease in MG’s earnings guidance for FY16 published on 29 February 2016, and
- the earnings guidance for FY16 was unlikely to be achieved from 8 March 2016 until 27 April 2016.
ASIC commenced proceedings in the Federal Court against Mr Helou and Mr Hingle on 20 June 2019 and sought declarations of contravention and disqualification orders (19-152MR).
In an Agreed Statement of Facts and Admissions, Mr Helou and Mr Hingle admitted to contravening sections 674(2A) and 675(2A) of the Corporations Act. The parties to the proceedings filed joint submissions for declarations and disqualification orders to be imposed.
Mr Helou and Mr Hingle also made applications under s206G of the Corporations Act to seek leave to manage certain unlisted proprietary companies whilst disqualified. Leave was granted by the Court.
In handing down his judgment, his Honour Justice Beach said, ‘The objectives sought to be served by the continuous disclosure regime relate to the efficiency and reliability of the capital markets and the accountability of participants in those markets. Contraventions of the continuous disclosure regime are serious’.
Mr Helou’s disqualification will commence on 13 November 2020 and cease on 13 November 2023.
Mr Hingle’s disqualification will commence on 13 November 2020 and cease on 13 November 2022.
Mr Helou and Mr Hingle are also required to pay a portion of ASIC’s investigation and legal costs.
Sections 674(2) and 675(2) of the Corporations Act require certain disclosing entities to notify the ASX and ASIC of information not generally available, which a reasonable person would expect to have a material effect on the price or value of securities of the entity. Sections 674(2A) and 675(2A) impose liability on persons involved in the disclosing entity’s contraventions.
On 15 December 2017, the Federal Court of Australia ordered MGRE, as trustee and responsible entity for the MG Unit Trust (ASX code: MGC) to pay a pecuniary penalty of $650,000 for contravening its continuous disclosure obligations (17-441MR).