ASIC has commenced civil penalty proceedings in the Federal Court against Noumi Limited (formerly Freedom Foods Group Limited), its former managing director and CEO Rory Macleod and its former CFO and company secretary Campbell Nicholas for alleged continuous disclosure failures, breaches of company director and officer duties, and false or misleading conduct. 

ASIC Deputy Chair Sarah Court said, ‘Directors and officers have a fundamental responsibility to ensure that their organisations comply with the law. However, in this case ASIC alleges Freedom Foods’ former CEO and CFO misled investors, auditors and directors, and allowed their company to breach continuous disclosure laws by failing to disclose a significant write-down, leading to an uninformed market.’ 

Freedom Foods is alleged to have failed to disclose material information about the value of inventories in its financial reports for the full year ending 30 June 2019 and the half year ending 31 December 2019. 

It is also alleged to have failed to disclose material information about its sales revenue, gross profit and profit after tax in its financial report for the half year ending 31 December 2019.  

ASIC alleges that Mr Macleod and Mr Nicholas were involved in Freedom Foods’ failures to disclose this information and that by allowing these failures, they breached their duties as a director and officer. 

ASIC further alleges that Mr Macleod gave false or misleading information to directors, auditors and shareholders of Freedom Foods, as well as the ASX, by representing that the full year and half year reports were accurate. 

Mr Nicholas is also alleged to have provided false or misleading information to Freedom Foods’ auditors and directors.  

Deputy Chair Court said that combatting governance failures is a key priority for ASIC. 

‘When directors and officers fail in their obligations, as we allege in this case, they not only cause harm to investors by denying them the information they are entitled to, they also erode confidence in Australia’s financial markets. ASIC is continuing its focus on potential breaches of company officer and director duties, and we will continue to take court action seeking penalties and other sanctions in appropriate matters’ she said. 

ASIC is seeking declarations of contravention, pecuniary penalties, disqualification orders and costs. 

The date for the first case management hearing is yet to be scheduled by the Court. 

Background 

Noumi is an Australian company listed on the ASX in the business of manufacturing and selling dairy and plant-based beverages and nutritional products. Prior to 2021, Noumi also manufactured and sold cereals and snack food products. 

Noumi traded as Freedom Foods until 30 November 2021. At the time of the alleged contraventions outlined in this media release, Noumi was known as Freedom Foods Group.  

Editor's note:

This media release was updated on 9 March 2023 with the Originating Process and Concise Statement documents.

Editor's note 2:

On 26 April 2023, ASIC filed a statement of claim in the matter. Download the Statement of Claim. A further case management hearing is listed for 24 May 2023.

Editor's note 3:

A further case management hearing has been listed for 13 December 2023.

Editor's note 4:

On 15 September 2023, a penalty hearing was listed for 15 December 2023 for ASIC's proceedings against Noumi Ltd. The next case management hearing remains 13 December 2023 for the other defendants, Nicholas and Macleod.

Editor's note 5:

The 13 December 2023 case management hearing for Nicholas and Macleod has been vacated and relisted for 28 March 2024. The 15 December 2023 penalty hearing between ASIC and Noumi Ltd has been vacated and relisted for 18 July 2024.

Editor’s note 6:

On 26 January 2024, ASIC filed an amended statement of claim in the matter.

Editor’s note 7:

The 28 March 2024 case management hearing for Nicholas and Macleod has been vacated and relisted for 22 May 2024.

Editor's note 8:

On 13 September 2023, Noumi filed an interlocutory application in the proceedings seeking a declaration that legal professional privilege (LPP) attaches to certain documents and resisted production of those documents to Macleod.

Following the hearing of the application on 14 and 15 February 2024, Sharrif J found that Noumi established LPP over the documents however impliedly waived it when it provided the documents to ASIC pursuant to a Voluntary Disclosure Agreement. On 28 May 2024, ASIC and Noumi both filed separate applications in the Federal Court for leave to appeal the decision and order of Shariff J. The 22 May 2024 case management hearing for Macleod and Nicholas was stood over until the application for leave to appeal has been determined.

Editor's note 9:

On 18 July 2024, the penalty submissions made by ASIC and Noumi were heard by Justice Jackman in the Federal Court. Judgment was reserved by the Court.

Justice Jackman made orders in relation to a s1317QF application brought by class action lawyers, with a hearing date set for 6 August 2024.

Editor's note 10:

The hearing regarding the s1317QF application brought by class action lawyers has been moved to 9 August 2024.

Editor’s note 11:

On 5 August 2024, the Federal Court ordered Noumi to pay a pecuniary penalty of $5 million for contravening its continuous disclosure obligations. See 24-174MR.

Editor’s note 12:

On 8 August 2024, the hearing of the s1317QF application (see Editor’s notes 9 and 10) was vacated and the Court made orders by consent.

Editor’s note 13:

ASIC and Noumi’s applications for leave to appeal the decision and order of Justice Shariff J (see Editor’s note 8) have been listed for hearing on 12 and 13 November 2024.

Editor’s note 14:

A hearing on final orders and penalties for ASIC's proceedings against Nicholas was heard on 8 October 2024. Justice Jackman reserved his judgment.