What is it about the struggling Elders (ELD) group and controversy?
The company has had to wear bad publicity from a range of issues including huge losses and write downs on tree plantations and managed investment schemes; losses on its car parts business (now sold), cost cuts and staff losses in its rural business.
Now something is smelling in its live cattle business.
A news release was issued the day after the company ruled off its books for the year to September.
Elders said more work was needed before "any impact" on the year’s financial results "can be determined".
From those comments and the timing of the announcement, it is clear something came to light on Monday as the groups accounts were being wrapped up for the year.
Elders shares fell half a cent to 10.5c, a fall of 4.5% on the day.
ELD 2Y – Is cattle Elders next tale of woe?
Elders issued a short statement yesterday that said seven senior employees in its live cattle export division have handed in their resignations as the company moves to investigate discrepancies in livestock values.
Among those to quit is the divisions’s general manager.
Separately it was reported yesterday that the seven has been poached by rival (and smaller rural group) Ruralco (RHL) to set up a live cattle business.
Ruralco tried to merge with Elders a couple of months ago, but that was rejected simply because Ruralco was too small and the amount of debt it would have to taken on too large.
Instead Elders refinanced its debts with its financiers, then revealed staff and other cuts in its rural services business to help pay for the refunding’s costs.
The release was issued as the company’s CEO Malcolm Jackman is visiting Indonesia with Prime Minister Tony Abbott, where the sensitive issue of live cattle exports is high on the agenda.
Elders is one of the major live players in the live cattle trade.
Elders said the discrepancies were being investigated by the board and that the company would make further announcements pending any revelations.
"Senior group management and the board have identified certain discrepancies and issues in relation to the reporting and recognition of livestock values in its live cattle export division which will require further assessment," it said.
"Elders does not currently believe the issue will have a material impact on the group’s outlook for future financial periods. However, given the nature of this matter, and the need to investigate fully, the company considers it appropriate to advise the market at this early stage."
"The change in personnel provides Elders with an opportunity, in line with its recently implemented efficiency strategy, to reshape the broader trading business," Mr Jackman said.
