A forecast the company called a draft still triggered its duty to tell the market
The Federal Court found a listed consumer goods company and its former chief executive officer breached disclosure laws by withholding a collapsed China sales forecast during raising.
The court's reasons, released on 13 August 2026 in Australian Securities and Investments Commission v McPherson's Limited [2026] FCA 1130 held that McPherson's Limited breached its continuous disclosure duty – its obligation to tell the market promptly about price-sensitive information – between 12 November and 30 November 2020.
The corporate regulator alleged the company had told investors on 20 October 2020 to expect full-year profit growth of 5 to 10 percent, built on roughly $48 million in forecast sales of its skincare brand to its main China distributor. The court found the distributor sent a revised forecast of about $26 million on 26 October 2020, and that results from China's "11/11" online shopping event on 12 November 2020 confirmed sales had fallen short.
The company argued the 26 October 2020 forecast was a draft, still subject to the distributor's approval and open to negotiation, so it could wait for a settled figure before disclosing. The court accepted the document was treated internally as a draft, but held that, taken with the 11/11 results, it left the earlier guidance without a reasonable basis from 12 November 2020.
The court found the company also engaged in misleading conduct under the Corporations Act and the Australian Securities and Investments Commission Act by not withdrawing or correcting the October guidance over the same period.
The court held the former CEO breached his director's duty of care by failing to bring the revised forecast and the 11/11 results to the board and recommend disclosure. A scheduled board meeting on 17 November 2020 passed without either being raised.
The court further found he authorised a 1 December 2020 announcement that presented a 27 November 2020 meeting with the distributor as the company's first awareness that the event had underperformed, when it had known the results since 12 November 2020. A statement could mislead even if literally correct, the court said.
The court rejected the regulator's claim that a notice issued to clear the share raising was itself defective.
The decision resolved liability only. The court ordered the parties to file proposed declarations and orders leading to a penalty hearing, and listed a case management hearing for 28 August 2026 if terms could not be agreed.
