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Adairs fined for disclosure breach

Adam Zuchetti
Adam Zuchetti
20 October 2017 1 minute readShare
Censorship, secret, information

ASX-listed linen and homewares retailer Adairs has been handed a five-figure fine after allegations it had breached continuous disclosure rules required of listed companies.

The Australian Securities and Investments Commission (ASIC) alleged Adairs breached disclosure rules in 2016 by not informing the ASX that its financial forecasts would be significantly lower than consensus among investors.

While it may seem like a minor contravention, not disclosing known information can have a material impact on a company’s share price.

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For this reason, ASIC issued Adairs with a penalty of $66,000.

“It is fundamental to the integrity of the market that listed entities disclose market sensitive earnings surprises immediately,” said ASIC Commissioner Cathie Armour.

 

ASIC noted that while Adairs has paid the penalty, compliance with infringement notices does not equate to admitting liability.

However, it does highlight one of the complexities businesses face once they have listed on the stock exchange – that of continuous disclosure of material facts.

HLB Mann Judd speculated at the beginning of 2017 that this year would deliver an upswing in the volume of SMEs listing on the ASX.

Yet with such strict requirements of listed companies, corporate advisory partner Nicholas Guest noted that listing was not a viable option for all businesses.

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“The main focus of the ASX is … to ensure the quality of the businesses coming to them into the market and trying to protect the integrity of the ASX,” he said at the time.

Adairs fined for disclosure breach
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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