Infant milk formula supplier Bellamy's Australia has paid a $66,000 fine after the corporate regulator alleged the company failed to properly inform the market of its financial performance in late-2016.
The Australian Securities & Investments Commission issued Bellamy's with an infringement notice for the alleged breach of its continuous disclosure obligations between October and December in 2016.
The payment of the fine is not an admission of guilt or liability by Bellamy's.
ASIC investigated the company's market disclosures after Bellamy's said on December 2, 2016 that it expected revenue in the first half of the 2016/17 financial year would be lower than expected at about $120 million, and its revenue in the second half of the year would be similar if trends continued.
That announcement triggered a massive share price plunge, which was exacerbated in January when Bellamy's flagged a significant drop in sales in its key China market and downgraded its full year earnings forecast.
ASIC said the Bellamy's board was told on October 18, 2016 that brokers were forecasting sales revenue of about $368 million in 2016/17, and they should have known at that point that the company was unlikely to meet the market forecast, and should have informed the market earlier than December 2.
Bellamy's said on Wednesday it believes it complied with its disclosure obligations in 2016, and had paid the fine as a way of concluding the matter and allowing its management to focus on the current operations of the business.
It has since renewed its board, due mainly to a shareholder revolt in early 2017.
"The new board and management team takes its continuous disclosure obligations seriously and will regularly review its continuous disclosure reporting procedures," Bellamy's chairman John Ho said in a statement.
Bellamy's shares gained $1.05, or 12 per cent, to $9.78, their highest level since December 2, 2016.
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