Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Fonterra slapped with $150,000 fine over NZX disclosure

Fonterra slapped with $150,000 fine over NZX disclosure

By Suze Metherell

June 13 (BusinessDesk) - The New Zealand Markets Disciplinary Tribunal has fined Fonterra Cooperative Group $150,000 for breaching continuous disclosure requirements to the NZX during the dairy manufacturer and exporter's botulism false alarm last August.

Auckland-based Fonterra undertook a world wide recall after it quarantined several batches of whey protein concentrate last August on concern it was contaminated with a potentially dangerous strain of clostridium bacteria, capable of causing botulism. The strain was ultimately shown to be harmless.

The dairy company first knew of the potential contamination on Wednesday July 31 but did not make the information public or inform the market until just after midnight on Friday August 2. Options in New Zealand's largest company trade on the Fonterra Shareholders' Market and allow dairy farmers to trade shares between themselves in a private market, while units in the Fonterra Shareholders' Fund give ordinary investors access to the dividend stream.

Fonterra Shareholders' Fund units closed at $7.12 on Friday August 2, before the company announced the contamination. When the market reopened on Monday August 5 the units traded at an intraday low of $6.50 and closed at $6.86, the tribunal said. A similar reaction was observed on the private dairy farmers' share trading market.

NZX Regulation, the regulatory arm of the stock market operator, said Fonterra breached continuous disclosure rules and should have told the market of the whey protein concerns as soon as possible.

The settlement will see Fonterra pay the NZX Discipline Fund $150,000, as well as the costs of the tribunal and contribute to costs incurred by NZX in relation to the matter, the tribunal said. The settlement also recorded that Fonterra did not agree with the NZXR view there had been breach.

In determining the settlement the tribunal said it considered several mitigating factors, including the "significant reputational consequences" the company had already suffered and its willingness to cooperate with the tribunal and resolve it quickly. Aggravating factors included Fonterra's knowledge of market regulations, and as a large company it had an "obligation to uphold high public standards and any breaches of continuous disclosure have the potential to affect a significant number of people."

Units in the Fonterra Shareholders' Fund recently gained 0.3 percent to $5.95, extending their gain so far this year to 2.2 percent.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

ICT Innovation: Six NZ Finalists In World Summit Awards

The awards are a global showcase of 40 projects, across eight categories, with a special emphasis on those which show the benefits of information and communication technology for the development of communities. New Zealand has finalists in six of the eight categories. More>>

ALSO:

Final Frontier: Rocket Lab And NASA Sign Commercial Space Launch Agreement

Rocket Lab has signed a Commercial Space Launch Act Agreement with the National Aeronautics and Space Administration (NASA). The agreement enables Rocket Lab to use NASA resources - including personnel, facilities and equipment - for launch and reentry efforts. More>>

ALSO:

Scoop Business: Wheeler Downplays Scope For ‘Large’ Rates Fall

Reserve Bank governor Graeme Wheeler says some market commentators are predicting further declines in interest rates that would only make sense for an economy in recession, although some easing is likely to be needed to maintain New Zealand’s economic growth. More>>

ALSO:

Ruataniwha Dam: Consent Conditions Could Mean Reduced Intensity

Legal advice sought by the Hawke’s Bay Regional Council on the Ruataniwha Dam consent conditions has confirmed that farmers who sign up to take water from the dam could be required to reduce the intensity of their farming operation to meet the catchment’s strict nitrogen limit. More>>

Health And Safety: Bill Now Sees Rules Relaxed For Small Businesses

Health and safety law reform sparked by the Pike River coalmine disaster has been reported back from the industrial relations select committee with weakened requirements on small businesses to appoint health and safety representatives and committees. More>>

ALSO:

Bearing Fruit: Annual Fruit Exports Hit $2 Billion For First Time

The value of fruit exported rose 20 percent (up $330 million) for the June 2015 year when compared with the year ended June 2014. Both higher prices and a greater quantity of exports (up 9.0 percent) contributed to the overall rise. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news