I have just seen the following come up in the Australian.
$NOU (formerly Freedom Foods, $FNP) is one of my all time big fails in investing, losing 90%+ of my capital in a large position.
While it can be hard to detect fraudulent management behaviour - and I don't blame myself for that - I made three big mistakes:
- Allowed position size to get too large, versus the risk. Risks were in plain sight (low margins) albeit obscured by fraudulent behaviour. At peak bravado, $FNP got to about 15% of my ASX portfolio.
- Allowed broker views (including Goldman Sachs) to give me more confidence in my spreadsheet jockeying that was justified.
- Increased my holding as bad news started to emerge, thinking I was being clever as a "long term investor".
It is important to learn lessons from your mistakes, and I think $FNP delivered a lot of educational value to me
Disc: Not held :-)
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Noumi's $5m penalty for ex-CEO, ex-CFO fails
Valerina Changarathil
Noumi will pay a $5m civil penalty and $50,000 towards financial regulator ASIC's costs in relation to court proceedings alleging disclosure failures and breaches by its former chief executive Rory Macleod and former CFO Campbell Nicholas.
ASIC sued the executives of Noumi (formerly Freedom Foods) in February 2023 alleging continuous disclosure failures, breaches of company director and officer duties, and false or misleading conduct.
The matter relates to the failure to disclose material information about the value of inventories in its financial reports for the full year ending June 30, 2019 and the half-year ending December 31, 2019. It is also alleged to have failed to disclose material information about its sales revenue, gross profit and profit after tax in its financial report for the half year ending 31 December 2019.
In its statement on Friday, Noumi admitted breaches on a qualified basis based on information that was known or should have been known by its former CEO and former CFO. "The company has cooperated with ASIC during the process," it told investors. The penalty is subject to consideration by the Federal Court on July 18.
