Gold miner Newcrest is reassessing its disclosure practices after it was revealed the miner carried out an analyst briefing causing the company to downgrade its valuation weeks before others had knowledge.
The company has brought in former chairman of ASX Dr Maurice Newman for the reassessment.
The ABC said Newman will compile a report and make recommendations to Newcrest’s board.
In his evaluation, Newman will assess whether the company’s disclosure policies are satisfactory and if staff are properly abiding by them.
Newcrest’s chairman Don Mercer made a statement to the share market saying the board is ‘deeply concerned’ about accusations of the company’s behaviour before announcing its plans to slash around 20 per cent of its corporate expenses and shut its Brisbane office.
The company’s share price slumped leading up to its announcement of a restructure and job cuts.
The company is under investigation from ASIC for its disclosure rules regarding market-sensitive information. The focus is on what the company told analysts immediately before its June 7 release, which included $6 billion in writedowns and production downgrades.
“Whilst the Board is already reviewing events leading up to 7 June 2013, we have decided to obtain an independent perspective,” Mercer said.
“I intend to report publicly on any resulting actions we decide are necessary.”
Australia Shareholders Association’s Stephen Mayne opined the company is concentrating on disclosure to divert attention from the bigger problems at the company.
“Shareholders have lost around $6 billion in write-downs, and we really need some broad and management accountability for that,” he said.
Senior lecturer in corporate governance at Macquarie University Michael Quilter sees a legal tactic to appointing Newman.
“There could be some element of trying to get in first, to pre-empt any negative reaction from ASIC in relation to the company’s conduct,” he said.
“It’s probably also a little bit of insurance to their future.”
The gold miner made job cuts and shut its Brisbane office in a bid to cut costs and improve cash flow.
Newcrest is also slashing local and expat jobs in Papua New Guinea where the company has half its mine assets. Around 150 jobs will go at the Lihir gold mine.
Newcrest shares stand at $9.56 today, up slightly from yesterday’s 10-year low of $9.30.