'Conflict of interest': Why the Noumi (ASX:NOU) share price is falling today

Noumi is in the spotlight again. We take a look at its latest announcement.

| More on:
A woman with a sad face looks to be receiving bad news on her phone as she holds it in her hands and looks down at it.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Noumi is currently embroiled in a saga with its (now former) auditor
  • Today it advised of the conclusion of its auditor's appointment after the auditor opened court proceedings against the company
  • Noumi shares are down almost 60% over the past year

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.

TradingView Chart

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.

More on Share Fallers

Person with thumbs down and a red sad face poster covering the face.
Share Fallers

The worst 3 ASX 200 stocks to buy and hold in October unmasked

You would have done well to avoid these three ASX 200 stocks in October.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why AFT, Amcor, Corporate Travel, and Macquarie shares are falling today

These shares are ending the week in the red. But why?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why AGL, Imugene, Star, and Woolworths shares are dropping today

These shares are dropping on Thursday. Let's see why investors are selling them.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Share Fallers

Why Corporate Travel Management, JB Hi-Fi, Mineral Resources, and Syrah shares are rising

These shares are having a strong session. Why are investors buying their shares?

Read more »

A guys points his fingers down.
Share Fallers

Why Brainchip, Cettire, Star, and Woolworths shares are being sold off today

These shares are having a difficult time on hump day. But why?

Read more »

Three guys in shirts and ties give the thumbs down.
Share Fallers

Why Black Cat, BlueScope, Cettire, and Coronado shares are falling today

These shares are missing out on the good times on Tuesday. But why?

Read more »

a business man in a suit holds his hand over his eyes as he bows his head in a defeated post suggesting regret and remorse.
Share Fallers

Why Adriatic Metals, Metcash, Paladin Energy, and Westgold shares are tumbling today

These shares are starting the week in the red. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Down 36% in 3 weeks, why is the Mineral Resources share price getting hammered again on Friday?

ASX investors are bidding down Mineral Resources shares again on Friday.

Read more »