Noumi's CFO hid warehouses of dead stock from the board — $590M write-off

Campbell Nicholas, CFO of Freedom Foods — the ASX-listed maker of Milklab oat milk, renamed Noumi in 2021 — was fined $100,000 and banned from managing corporations for four years by the Federal Court for deliberately misleading the board about revenue and inventory figures. Justice Ian Jackman found he provided 'direct representations to the board, in which he asserted there were no problems with the financial statement when he knew that to be false).

What was being hidden: warehouses full of expired, rejected or otherwise obsolete stock that Nicholas had known about for nearly a year. When the accounts were finally restated, the company wrote off $590 million, trading was suspended for nine months, the share price crashed and stayed at rock-bottom, and shareholders launched a class action.

Nicholas told ASIC he acted under pressure from CEO Rory Macleod, who had 'complete authority and control over all messaging to the board) in what Nicholas called an autocratic culture — by March 2020 the stress had him drinking more than a bottle of wine a night and feeling 'close to going over the edge). Justice Jackman accepted the pressure as context but held that Nicholas, also company secretary and disclosure officer, bore vital responsibility for governance.

$590M in write-offs, a nine-month trading suspension, a crashed share price, a shareholder class action, a $100,000 fine and a four-year ban

Millions of dollars of dead stock accumulated for nearly a year while the board was told the financials were clean.

The CFO doubled as company secretary and disclosure officer — the exact roles responsible for correcting the record.

An autocratic reporting culture made the CEO the sole channel to the board, so bad news had no path upward.

Continuous disclosure failures denied investors information and, as ASIC noted, eroded market confidence.

A CFO who signs clean statements to protect the CEO)s story owns the lie in the eyes of the court — pressure is context, not a defence.

ASIC)s case — filed in early 2023 after an investigation begun in July 2020 — covered three defendants: Noumi, Nicholas and Macleod. The Federal Court ordered Noumi to pay $5 million in a judgment revealing fresh details of how the cover-up unravelled; the company, backed by the billionaire Perich family, had installed Michael Perich as chief executive after renaming itself Noumi.