Newcrest Mining has been largely cleared of breaching market disclosure rules by an in-house review that has been described as restricted and lacking scope.
The review by former ASX chairman Dr Maurice Newman was published on Thursday after being commissioned by Newcrest in the wake of the market disclosure scandal that surrounded the goldminer's June 7 corporate restructure.
The gloomy restructure was preceded by an 18 per cent slump in the Newcrest share price and multiple downgrades by analysts, prompting claims the miner had selectively briefed certain big shareholders before the rest of the market.
But after 10 weeks of investigations, Dr Newman said he could not see any "smoking gun" piece of evidence that would suggest malpractice at Newcrest.
Instead, he delivered a scathing portrayal of the analyst and brokerage community in Australia, suggesting that analysts had been slow to react to a slump in the gold price during April, were often inexperienced and unable to understand material published by Newcrest.
The biggest winner out of the report could be Newcrest's investor relations manager Spencer Cole, who Dr Newman believes could not have known about the bucket of bad news that was contained in the restructure. Mr Cole has been under intense scrutiny in recent months over what was said to analysts in meetings held before the restructure. But Dr Newman noted that Mr Cole's meetings with analysts were scheduled well in advance of the board meetings that produced the restructure.
"I am satisfied that the manager, investor relations, was not in a position to be informed about the asset impairment issues or the dividend deliberations at the time of the analyst meetings, as this information had been quarantined from him," he said.
Dr Newman found several minor instances where Newcrest did not fully follow its own protocols around meetings with the investment community, but generally gave the company a clean bill of health.
"My sense is that the company takes its continuous disclosure obligations very seriously and, by and large, has in place processes to reinforce this."
He made 17 recommendations for Newcrest to consider, most of which were widely accepted notions around how to interact with investors and how to maximise disclosure. Newcrest accepted all of them.
But a defining feature of Dr Newman's report was his lack of exposure to key analysts and brokers involved in the saga, and his lack of access to crucial information and data. Dr Newman conceded he had not fully analysed Newcrest's email system, nor trading data around June 7, nor the written records of the analysts who downgraded the stock in the days prior to the event. He said it was beyond his terms of reference.
An ongoing investigation into the saga by the Australian Securities and Investments Commission also prevented many analysts from speaking to Dr Newman.
ASIC declined to comment on Dr Newman's findings, but Shaw Stockbroking analyst Vincent Pisani said it was clear there was a lack of access to important people and information.
"There were more caveats at the beginning of that report than I have ever seen, but I guess he could only work to the degree that he was allowed to work," he said.
Dr Newman is the head of Opposition Leader Tony Abbott's business advisory council, and shareholder activist Stephen Mayne said the report could therefore become an influential one if the Coalition won government this weekend. He said: "The recommendations are sweeping at a policy level ... him saying this at this point in time elevates the policy discussion to a potential ASX, ASIC and legislative response."
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