Live Export

Elders live cattle trading investigation update

Beef Central, 04/10/2013

Elders has estimated that alleged discrepancies in reported livestock values it referred to in a statement to the Australian Stock Exchange last Tuesday amount to $18m.

In a statement released to the Australian Stock Exchange on Friday afternoon, the rural services company said it was continuing to investigate the reported discrepances, and had yet to determine whether the alleged losses had resulted from any wrongdoing by an employee.

Elders announced the reported discrepancies in a statement to the exchange on Tuesday, in which it also confirmed the resignations of seven senior management staff from its live cattle trading division. 

It has since been confirmed that the seven staff will join Elders' rival Ruralco.

In public comments Mr Jackman has stated that there is no reason to believe the resignations and the reported discrepancies are linked, however he said the resignations meant that the investigation "will probably have a different level of scrutiny and intensity".

Mr Jackman said the seven staff all had restraint of trade clauses in their employment contracts with Elders which restricted their ability to work for a competitor for varying periods of six months to two years depending on the individual, and has stated that Elders will do everything it can to ensure those obligations are fulfilled.

The latest Elders statement released on Friday afternoon reads: 

Elders (ASX: ELD) refers to its announcement to the ASX on 1 October 2013 about the discovery of discrepancies and issues in relation to the reporting and recognition of livestock values in its live cattle export division.

Whilst the investigation into that matter is on-going, Elders’ senior management today estimates that the impact on inventory values of those discrepancies and issues is approximately $(18m).

Elders’ senior management expects that impact to negatively affect underlying NPAT, for balance dates already passed (including the year ended 30 September 2013), in aggregate by approximately the same amount.

Elders’ senior management does not expect the issue to be of a recurring nature and confirms that senior management does not presently believe the issues will have a material impact on the Group’s outlook for future financial periods.

Elders notes that its investigation continues, including verification of the financial implications of the discrepancies and issues and, amongst other things, analyses of root causes and whether there has been wrongdoing by any employee.

Elders has retained external expert legal and financial assistance in the conduct of that investigation.

 

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