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

 

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

NASA, NOAA: Find 2014 Warmest Year In Modern Record

Since 1880, Earth’s average surface temperature has warmed by about 1.4 degrees Fahrenheit (0.8 degrees Celsius), a trend that is largely driven by the increase in carbon dioxide and other human emissions into the planet’s atmosphere. The majority of that warming has occurred in the past three decades. More>>

ALSO:

Scoop Business: New Zealand’s Reserve Bank Named Central Bank Of The Year

The Reserve Bank of New Zealand’s efforts to stifle house price inflation by using new policy tools has seen the institution named Central Bank of the year by Central Banking Publications, a publisher specialising in global central banking practice. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news