A self-commissioned assessment of Newcrest Mining’s disclosure and investor relations practices has cleared the company of selectively briefing analysts in June.
Former ASX chairman Dr Maurice Newman AC – who was appointed by Newcrest to conduct the independent review – reached his conclusions despite an ongoing ASIC investigation limiting
access to key analysts or critical emails. Newcrest’s share price plummeted days before its 7 June market update, leading to allegations of selective analyst briefings and triggering an ASIC investigation and two potential class actions.
In his report, Dr Newman concluded that the volatility in Newcrest stock between 5 and 6 June appeared to follow a ‘sell’ recommendation by UBS on 4 June.
“Five other brokers also published broker reports on 5 and 6 June, two of which, Citi and Credit Suisse, also recommended selling,” he said.
“This coincidence of timing seems to have been the catalyst which gave rise to suggestions of “selective briefings”; implying certain brokers had gained a prior insight into the 7 June ASX announcement through the company’s investor relations function.”
While there had been no tell-tale signs of repeated lapses in laid-down procedures and protocols, aspects of company policy may not have been strictly complied with, he said.
“My sense is that the company takes its continuous disclosure obligations very seriously and, by and large, has in place processes to reinforce this,” Dr Newman said.
“That does not mean improvements in investor relations policies and procedures cannot be made and I have made a number of recommendations in this regard for the board’s consideration.”
Newcrest chairman Don Mercer said the board supported all of Dr Newman’s recommendations in principle.
“We will now proceed with their implementation, noting that a number are already reflected, fully or in part, in existing company policies and procedures.”
Dr Newman said the ASIC investigation, which could take up to a year to complete, could unearth information not available to him in his enquiries.
Newcrest reported a net loss of $US5.77 billion for the 2013 financial year, as missed targets and the gold price slump took a major toll on the company’s bottom line.