The Noumi Ltd (ASX: NOU) share price has slipped into the red this afternoon and is currently down 0.88% at 22.5 cents.
Noumi, formerly Freedom Foods, is embroiled in a saga with its auditor after Australian regulators pointed the finger at both parties late last year.
Today, the company released an important update regarding the conclusion of its auditor’s appointment, following the auditor’s decision to open court proceedings against it.
What did Noumi announce today?
As a quick backdrop, back in December 2021, Noumi was served with two class action proceedings from the Victorian Supreme Court.
The court alleged that both Noumi and its auditor, Deloitte Touche Tomatsu, had breached the Corporations Act 2001.
Today, Noumi advised Deloitte has notified the Australian Securities and Investment Commission (ASIC) that it believes “a conflict of interest situation exists in connection with the class action proceedings brought against it in relation to its role as auditor of the company”.
As a result, Deloitte will finish up as Noumi’s auditor on 13 April 2022.
Where the conflict of interest arises, Noumi says, is due to the arguments in Deloitte’s defence to the class action.
Specifically, Deloitte will allege the company was “a concurrent wrongdoer” in its proportionate liability defence, while lodging a defensive cross-claim against Noumi.
“Noumi intends to vigorously defend all claims made against it in the proceedings,” the company stated today.
The company has begun the search to appoint a new auditor and will update the market when doing so, pending shareholder approval.
Noumi’s defence is due at the court on 8 April 2022, and thus investors can expect further updates on the saga at that time.
Noumi share price snapshot
The Noumi share price has tracked lower in 2022 and is now down 45% this year to date. It is also down 24% in the past month.
Its shares are down almost 60% over the past year, meaning Noumi must gain 150% before returning to its previous highs.
The post ‘Conflict of interest’: Why the Noumi (ASX:NOU) share price is falling today appeared first on The Motley Fool Australia.
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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Freedom Foods Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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