Newcrest to Restrict Investor Contact Amid Disclosure ReviewDavid Stringer
Newcrest Mining Ltd., the Australian gold producer under regulatory scrutiny over its disclosure practices, will restrict its dealings with investors and analysts after an internal review.
The company will implement recommendations made in the review by Maurice Newman, a former chairman of the Australian Securities Exchange, which include limiting outlook forecasts to 12 months, Melbourne-based Newcrest said today in a statement.
“Consideration should be given to changing the emphasis from pro-active to reactive contact,” Newman wrote in the report. While restricting discussions with shareholders and analysts “may not be optimal for the investing public, it may be the company’s most prudent approach,” Newman wrote.
The Australian Securities and Investments Commission is investigating a drop in Newcrest’s share price ahead of a June 7 announcement when it flagged a writedown of as much as A$6 billion ($5.5 billion). Credit Suisse Group AG, Citigroup Inc. and UBS AG were among banks that cut their ratings on Newcrest in the three days before its statement, prompting concern from regulators. Newcrest is continuing to assist ASIC’s inquiry, the company said.
Newman found no “smoking gun” evidence indicating analysts received selective briefings from Newcrest ahead of the announcement, he wrote. He said he hadn’t been able to interview analysts because of the ASIC inquiry and hadn’t carried out detailed checks of e-mails or written records.
Newcrest should communicate more commonly through stock exchange statements rather than analyst briefings, and impose blackout periods on investor relations work ahead of major announcements or board meetings, he wrote.
After delivering a report in 10 weeks, Newman said the fact ASIC’s investigations often take around 12 months mean some “company reputations can unnecessarily suffer.” The regulator should be more transparent about the progress of its inquiries, he wrote. ASIC spokesman Andre Khoury declined to comment, or provide an update on its Newcrest inquiry.
Newcrest fell 1.5 percent to A$13.20 at the close in Sydney, the most in a week. Australia’s benchmark S&P/ASX 200 index fell 0.4 percent. The gold producer is the worst performer this year among Australia’s 50 largest publicly listed companies, declining 40 percent.
“The disclosure question is a bit of a sideshow to the broader question that the chairman and CEO ought to be held to account for A$6 billion in writedowns,” Stephen Mayne, spokesman for the Australian Shareholders’ Association said today by phone. The association represented 277 retail investors at Newcrest’s 2012 annual general meeting.