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23-042MR ASIC sues former Freedom Foods Group and its former CEO and CFO alleging disclosure failures and breaches of director and officer duties
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 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.
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.
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.