Noumi’s penalty agreement with the Australian Securities and Investments Commission (ASIC) regarding alleged historic breaches of the company's disclosure obligations, brings the company one step closer to shutting the door on the tumultuous years before it rebranded from Freedom Foods Group in 2021.
ASIC launched the action against Noumi, its former CEO, Rory McLeod, and former CFO, Campbell Nicholas, for alleged disclosure breaches in 2018-19 and 2019-20. The company has cooperated with ASIC throughout the process.
Noumi has admitted breaches on a qualified basis based on information that was known or should have been known by McLeod and Nicholas.
In May 2020, McLeod told the ASX there would be $21 million in write-downs due to changes to its commercial and organisational structure. Within a month he was gone, and the inventory write-downs were revised to be closer to $60 million, with $10 million in bad debts.
By December 2020, the full extent of the damage was laid bare: $590 million in write-downs; almost $175 million in losses for the year, having to restate previous years’ results, including FY19 pivoting from an $11.6 million profit to a $145.8 million loss.
The write-downs saw its share price collapse, two class actions, the replacement of its senior leadership team and board, overseas litigation, and recapitalisation.
ASIC and Noumi have agreed on a $5 million civil penalty and $50,000 contribution to ASIC’s costs.
On 18 July, the two will submit the penalty to the Federal Court for its consideration.
