MG has $265m in funds

THE FINANCIAL shell of fallen dairy co-operative Murray Goulburn is sitting on $265 million in equity, but it is still unclear how much investors will see once the company is wound up.

The group, which exists to fulfil financial reporting obligations and manage retained litigation, reported a $24.4 million loss for the year to June 30, with operational income having completely dried up following Murray Goulburn’s sale to Saputo last year.

The group said $6.92 million in interest income was more than offset by litigation costs tied to the $42 million Endeavour River class action settlement in June.

The Endeavour matter was launched on behalf of 1300 investors who lost out when the former milk processor unexpectedly cut milk prices and downgraded profit guidance in 2016.

The group said the bulk of the settlement was covered by insurance, with the remaining $8.2 million to be recovered by a third-party insurer.

The group now awaits the outcome of a second class action proceeding, known as the Webster Class Action, with a trial date set for February next year and an estimated trial time of four weeks.

Financial reports lodged with the ASX on August 20 showed the group still had $264.5 million in total equity, down from $288.9 million a year ago.

The group said it would be wound up after the retained litigation was finalised, with the remaining funds — if any — to be distributed among shareholders and unit-holders.

“The board is of the view that the group can and will be able to pay its debts as and when they fall due, however, as the winding up of the group is intended to occur at an as yet undetermined point in the future, these financial statements are not prepared on a going concern basis,” the co-op said in its report.

Australia’s corporate watchdog ASIC has announced legal action being taken against the former managing director.

ASIC has started proceedings in the Federal Court against former managing director Gary Helou and former chief financial officer Brad Hingle, alleging a failure to disclose to the stock exchange, sensitive market information in a timely manner. ASIC alleges they were involved in the breaches in their continuous disclosure obligations under the Corporations Act; and breached their duties as directors and officers to act with reasonable care and diligence by failing to adequately monitor the financial position and performance of Murray Goulburn against the February Earnings Guidance.

They are also accused of failing to inform the board before April 26, 2016 of information which indicated the February Earnings Guidance was unlikely to be achieved.