Two former senior Murray Goulburn executives are expected to appear before the Federal Court early next year, after a judge dismissed their motion to have the proceedings thrown out today.
- Gary Helou and Bradley Hingle lose a bid to shrug off legal action brought by ASIC
- ASIC is seeking both men admit they broke the law, and have them disqualified from managing a corporation
- A hearing is expected early next year
The Australian Securities and Investment Commission (ASIC) alleges former managing director Gary Helou and former chief financial operator Bradley Hingle failed to provide sensitive information to the Australian Stock Exchange in the months before Murray Goulburn slashed its farm gate milk price, and triggered a crisis in the Australian dairy industry.
ASIC is seeking declarations from Mr Helou and Mr Hingle that they contravened parts of the Corporations Act by not disclosing sensitive information to the market before cutting the milk price.
It is also asking the Federal Court to disqualify Mr Helou and Mr Hingle from managing a corporation for as long as the court sees fit.
In dismissing Mr Helou and Mr Hingle’s application to have the matter thrown out, Justice Beach also indicated his willingness to hold a joint trial in February next year — hearing the ASIC matter and a class action at the same time.
The class action is being brought by John Webster Cruise on behalf of investors in the Murray Goulburn unit trust.
ASIC’s action is the last of five proceedings in the Federal Court relating to Murray Goulburn’s actions in 2015 and 2016.
ASIC has already had two previous matters heard, along with the Australian Competition and Consumer Commission’s successful action that was wrapped up in 2018.
A separate class action ended in June this year.
Murray Goulburn was Australia’s largest dairy processor, supplying the domestic market and exporting large volumes of dairy products.
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In early 2016, after months of signalling to farmers that they should expand their dairy herds and promising to pay up to $6 a kilogram of milk solids (kgms), Murray Goulburn suddenly slashed the milk price and announced farmers would have to pay money back to the processor.
That decision triggered a lengthy and painful period for the dairy industry, which saw farmers exit the sector in droves and culminated in the sale of the historic cooperative to Canadian dairy giant Saputo.
In 2017, the Federal Court ordered the Murray-Goulburn Unit Trust, a part of the company listed on the ASX, to pay a $650,000 fine for breaching the ASX’s rules governing continuous disclosure of information to the market.
All parties are expected to return to court in November to finalise dates for a hearing in 2020.