it would be against the company, its directors and auditors for their negligence in approving and releasing a misleading accounting for the net present value of the trail commissions.
The intention of the regulator -ASIC- to intervene to outlaw or otherwise restrict direct sales of insurance products including in particular funeral insurance was well understood and anticipated in the industry and within 2 days of auditor sign-off on the $65million value ASIC did just that .
The prior history of low renewal of Freedom's funeral product was well established ...not surprising given that the customer was premium-free for 12 months.
The adverse attention of the Hayne Inquiry , the submissions by the COO Orton to it in the weeks prior to release of the accounts and the COO's appearance at the Hayne Inquiry on the day of auditor sign-off should have put the auditor and the directors on notice that a conservative valuation of trail commissions was necessary .
So, all investors who relied on audited accounts and an NPV of $65million for the trail commission in the making of their FIG investment in the days subsequent to the 29th August will be eligible to participate in such a class action which I anticipate will be launched once the writedown of the trail commission asset is made public in late January.
FIG Price at posting:
2.3¢ Sentiment: None Disclosure: Held
