A former finance chief of Australia’s Freedom Foods has been fined and barred from management for four years over contraventions of the corporations act.
Campbell Nicholas, who resigned from Freedom Foods as chief financial officer in June 2020 amid an investigation into “fraudulent activity”, was fined A$100,000 ($67,126) by the Federal Court of Australia yesterday (17 October).
According to the Court document, in a case brought by the Australian Securities and Investments Commission (ASIC), Nicholas was also “disqualified from managing corporations for a period of 4 years”.
He was also ordered to pay ASIC’s court costs in a hearing also attended by representatives of Noumi, the Australian business that changed its name from Freedom Foods in 2021.
Nicholas had admitted his guilt to the various charges of violations of the corporations act, while employed at Freedom Foods, in emails and letters sent to the court in January, July and August of this year but did not appear at the hearing, according to the Court document.
He was accused of contravening the act for a range of offences over a period from August 2019 to May 2020, namely failing to notify the Australian Securities Exchange (ASX) of important financial information.
The Court document listed some of the offences as overinflating inventories in Freedom Foods' financial reports.
“The FY-19 disclosed inventories were $120.2m, which included not saleable inventory which was recorded in the FY-19 financial report at a value of at least $20m,” the document stated.
“The financial statements and notes in the FY-19 financial report did not give a true or fair view of the financial position and performance of FFG” [Freedom Foods Group, the Court concluded.
In the 2020 fiscal half-year report, Nicholas was also accused and found guilty of the fact “disclosed profit was overstated by at least $8.5m”.
Among the judgements, the Court found: “Mr Nicholas's involvement in FFG's failure to disclose the relevant information to the market stems from the deliberate withholding of material, financial information by a senior officer from the board and auditors.”
It added: “Mr Nicholas's contraventions form part of a course of conduct that spanned eight months and two financial reporting periods. It therefore cannot be said to be isolated, or a momentary lapse in judgement.”
In acknowledging his actions, the Court document read: “Mr Nicholas has provided a signed written statement dated 24 August 2024 in which he has expressed contrition, remorse and has unreservedly apologised for his conduct.
“Mr Nicholas is 58 years old and is unlikely to have the opportunity to start a new career in management if so desired, after the disqualification period ends.”
Noumi issued a statement to the ASX on 16 October.
It said that “following mediation, it has reached an agreement to settle the consolidated class action commenced against it, and its former auditors..”
Noumi added: “The settlement is subject to certain conditions relating to the provision by Noumi, and acceptance by the class action plaintiffs of financial and other information, and is also subject, as is required for these matters, to Court approval.”
The company said it had agreed to pay legal and professional costs of A$4m which will be reported in its 2025 financial results.
