Newcrest debacle sparks ASIC action

THE Australian Securities & Investments Commission plans to more closely monitor communications between companies and investment analysts that cover their stock in the upcoming reporting season.
Newcrest debacle sparks ASIC action Newcrest debacle sparks ASIC action Newcrest debacle sparks ASIC action Newcrest debacle sparks ASIC action Newcrest debacle sparks ASIC action

 

Kristie Batten

It comes amid speculation that Newcrest Mining may have selectively briefed analysts last month in the lead-up to the announcement of $A5-6 billion in expected write-downs.

Several analysts downgraded Newcrest in the 48 hours before the announcement, prompting disclosure suspicions at the Australian Securities Exchange.

ASIC previously said it was monitoring the situation but had not launched a formal investigation.

In what is widely believed to be a direct response to the Newcrest incident, yesterday ASIC said it would be looking to conduct “spot checks” with selected to companies to hear how they briefed analysts.

“ASIC’s priority is to ensure fair and efficient financial markets,” ASIC commissioner Cathie Armour said.

“All investors – large and small – should have access to equal information from listed entities when making their investment decisions.”

The ASX recently released a revised Guidance Note 8, which assists companies with continuous disclosure obligations and price sensitive material.

ASIC said it would be working in the coming weeks to raise awareness of the risks of selective disclosure when briefing analysts and reminding companies and analysts of their obligations.

The regulator said it expected most companies would be cooperative.

In the wake of the criticism last month, Newcrest recently announced a full review of disclosure.

The gold miner appointed former ASX chairman Dr Maurice Newman AC to conduct the review and report back to Newcrest with the findings and recommendations to be considered by the board.

The day the review was announced, Newcrest shares hit a nine-year low of $A9.06 and have lost more than 50% this year.

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