ADAIRS PAYS BIG FINE FOR BREACHING DISCLOSURE AGREEMENTS
20 October 2017,
ASX-listed retailer Adairs (ASX: ADH) has paid a $66,000 fine after breaching its disclosure obligations to the ASX.
The Australian Securities & Investments Commission (ASIC) fined the company after it failed to comply with continuous disclosure obligations.
ASIC found Adairs was in breach of its continuous disclosure obligations between 23 September and 2 November 2016 by failing to inform the ASX that its forecast figures for the 2017 financial year would be materially lower than the market consensus.
Cathie Armour, ASIC Commissioner, says companies need to ensure changes to earnings must be disclosed as soon as they are made aware.
"It is fundamental to the integrity of the market that listed entities disclose market sensitive earnings surprises immediately," says Armour.
In August 2016, when Adairs announced its full financial year 2016 results, the market consensus of the brokers' forecast for Adair's FY17 results was:
Following the FY16 announcement, on 23 September, Adairs received updated financial reports and revised forecasts which were substantially lower than what was reported in August. The revised forecasts for the full financial year 2017 were:
Adairs did not notify the market of these revised changes until over a week later on 2 November when the company released a trading update.
Following the announcement of the $66,000 fine, Adairs' shares have fallen by 2.24 per cent to $1.53.
Business News Australia