News

AA Co tells ASX directors did not pre-warn Joe Lewis of flood’s financial impact

Beef Central, 01/08/2023

THE Australian Agricultural Co has denied that one of its board members representing major shareholder Joe Lewis’s Tavistock group prematurely disclosed material losses to the company following Queensland’s 2019 floods.

AA Co today responded to a query letter from the Australian Securities Exchange, following the indictment of major shareholder Joe Lewis over insider trading and financial fraud charges (see earlier report).

Flooding on one of AA Cos Gulf properties in early 2019

Part of the indictment alleged that a board member employed by Tavistock informed Mr Lewis prior to the information’s public release that the losses to the company (from Queensland’s 2019 floods) were material.

AA Co said that inquiries had been made to the two relevant board members, and that based on the information provided, the answer to that suggestion was ‘no.’

The company made the point that the relevant board meeting referred to in the indictment occurred at 2pm on Sunday 10 February 2019, Brisbane time.

Part of the New York Southern District indictment of Mr Lewis claimed that on or about 10 February 2019, AA Co’s board held a meeting to discuss the effects of recent the flooding on the company, and determined that the losses… were likely to be material.

“During the meeting, the board also determined that it should issue a press release to disclose the material impact to the market,” the indictment suggested.

“At the time, the fact that the flooding was likely to cause a material financial loss to AA Co was not publicly known, and reporting about the possible impact of the flooding had not been confirmed by the company. That same day, a board member employed by Tavistock informed Joseph Lewis, the defendant, that the losses to the company were material, that AA Co did not have insurance coverage relating to the cattle it lost in the flooding, and that the Australian government was not expected to cover any portion other losses,” it claimed.

The indictment claimed that AA Co’s announcement to the ASX on 11 February disclosed that “of AA Co’s Gulf properties, Wondoola station has been most affected and its current herd of approximately 30,000 head of cows and their calves is expected to sustain extreme losses. Canobie, Dalgonally and Carrum stations have a total current herd of 50,000 head of cows and their calves, and is expected to sustain lower but still material losses.”

AA Co’s flood announcement also said, “The overall impact of these seasonal conditions on the company’s financial earnings for the 2019 financial year (ending March 2019) is expected to be material, and management is currently working through an evaluation of the situation. An update will be provided when further assessments from the ground are available.”

 

HAVE YOUR SAY

Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.

Comments

  1. Simon Jenkins, 01/02/2024

    I read in the news that Joe Lewis (owner of Tavistock – which controls AACo) has pleaded guilty to receiving material confidential information from AACo board members. Surely this contradicts the AACo’s board denial that any director shared information with Tavistock/ Joe Lewis about impacts of the floods etc? Both statements can not be true.

    We’ve seen no suggestion that it was AA Co board members who supplied Joe Lewis with information about the 2019 floods, Simon. Management provided daily updates for board members (and a bunch of other stakeholders) as the flood unfolded. Editor

  2. Simon Jenkins, 01/08/2023

    There are eight directors on the AACo board. I wonder why AACo only asked two of them if they shared the confidential information? The letter from ASX asked if ‘any directors’ shared the information. Seems like legal games to say “the two we asked told us they didn’t”.

Get Beef Central's news headlines emailed to you -
FREE!