It’s no wonder that Newcrest Mining (NCM) is worried that corporate regulators, led by ASIC, are going to find something amiss with its continuous disclosure regime after the kerfuffle over whether the company did signal to analysts and some others that there was going to be a downgrade and asset impairments – news that wasn’t freely available to the market ahead of its release nearly three weeks ago.
Newcrest announced yesterday that it has hired former ASX chairman Maurice Newman to review the way it keeps investors informed about its business.
And it later confirmed that it had spoken to various analysts before the big write down and restructuring statement on June 7.
Newcrest Mining chief Greg Robinson confirmed to the media yesterday that meetings were held with investment bank analysts in the days prior to June 7.
But the CEO continued to claim the company did nothing wrong in terms of revealing market sensitive information.
Newcrest’s relationship with certain analysts has been under intense scrutiny over recent weeks after the company’s share price fell by close to 15% in the three days (from the Tuesday) to the close of business on Thursday June 6.
NCM YTD – Down 60% In 6-Months
For weeks now Newcrest has continued to defend itself against claims it selectively briefed some analysts ahead of the June 7 statement.
That defence hasn’t denied that meetings took place, but does deny that sensitive information was given to some of those analysts ahead of the release to the wider market and investment community.
Speaking to media yesterday, Mr Robinson confirmed that there were briefings ahead of June 7.
"There were briefings, there were discussions with analysts as our investor relations group do on a regular basis.
"They do that under the policy, procedures and standards we have in the company , and again from our point of view we don’t think they’ve done anything incorrect, we think they’ve done the job they are meant to do," he said.
Analysts from Citi, Bank of America Merrill Lynch, UBS and Credit Suisse published research notes on Newcrest in the days in the run up to June 7, most of which predicted a more weaker future for the company under a lower gold price and a changed company strategy. Many of those analyst predictions proved true on June 7.
"Whilst the board is already reviewing events leading up to 7 June 2013, we have decided to obtain an independent perspective," Newcrest chairman Don Mercer said in a statement yesterday.
Former ASX chairman Maurice Newman will conduct the review of the company’s disclosure and investor relations practices and will provide a report to the Newcrest board as soon as possible, including recommendations for any improvements or changes in the company’s disclosure practices.
"If steps are required to be taken as a result of the review of these matters, the board will ensure that this occurs without delay," Mr Mercer said.
"I intend to report publicly on any resulting actions we decide are necessary."
Newcrest shares fell again yesterday to a low of $9.30 at the close, down 2.4% or 23c.
That was more in reaction to another weak night for gold with the metal again losing ground.