can management be trusted
"Shares fall again as API cops more flak Email Print Normal font Large font Jamie Freed September 30, 2006
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AUSTRALIAN Pharmaceutical Investments' share price continued to tumble on Friday as the Australian Shareholders Association took the company to task over its disclosure practices.
ASA chairman Stephen Matthews blasted the company for its failure to release more details about the $17.2 million it was unable to reconcile in its accounts.
The $17.2 million is believed to be a balance sheet issue, meaning it could actually involve much larger figures in the accounts.
At API's annual meeting on Thursday, Mr Matthews raised the hypothetical example of the company sending out $117.2 million in stock and receiving only $100 million in return.
"There is that potential," API chairman Peter Robinson admitted, while not confirming any specific numbers.
Mr Matthews said he was disappointed with API's failure to clarify the issue with shareholders in previous communications.
"I think it's an attempt to minimise the potential size of the problem," he told the Herald on Friday. "While there are no untruths involved, it's not being frank and candid."
API has also come under pressure from the ASA over other statements it has made to the stock exchange. There has been some confusion over the reasons behind the departure of former chief executive Jeff Sher.
"Could you please clarify which of your public statements is correct and advise if Mr Sher was terminated, resigned or was made redundant?" Mr Matthews asked Mr Robinson in an email sent on Friday.
At the annual meeting on Thursday, Mr Robinson said Mr Sher's position had been terminated, but that contradicted two earlier statements to the ASX.
In a briefing after the company's annual meeting on Thursday, API chief executive Stephen Roche clarified that the informal approaches it had received regarding "the company's ownership" related to individual divisions rather than API as a whole.
ABN Amro Morgans analyst Tanya Solomon, who has a "sell" recommendation on the stock, said she did not think API's statement to the ASX had been misleading.
"I think they've provided disclosure in line with guidelines," she said.
But Mr Matthews said the statement about approaches from other parties released on Wednesday, which sent shares soaring 19 per cent, "probably could have been better expressed".
Shares have since erased all of those gains, closing 13c lower at $2.23 on Friday.
A spokesman for the ASX said it felt the market was "sufficiently informed" for API shares to continue trading but could not comment further"
API Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
