Diplock calls for debate on debt disclosure

Jane Diplock

Securities Commission chairwoman Jane Diplock wants public debate on whether listed companies should reveal details of their banking covenants.

Shareholders Association chairman Bruce Sheppard has highlighted the issue by identifying 19 listed companies he has personal concerns about.

Only two - Sky TV and TeamTalk - have not responded to letters seeking clarification about their finances.

The other responses, from Goodman Fielder, ProvencoCadmus, SkyCity, Hellaby, Kirkcaldie & Stains, Allied Farmers, Restaurant Brands, Metlifecare, Ebos, F&P Appliances, Nuplex, Abano, Freightways, Skellerup, Comvita, Tourism Holdings and Vector are available on the association's website.

Banks do not usually allow companies to disclose such information, citing commercial sensitivity. However, at least one private company, the Noel Leeming Group, has revealed such details in its latest accounts. It has also disclosed a breach of its covenants.

Diplock told the Business Herald several weeks ago she believed public companies should only have to disclose such details if they were "material".

A breach of banking convenants would be material and the commission would prosecute any public company that failed to disclose that.

However, being close to a breach was different and might need to be debated, she said.

"If a company is in negotiations with its bankers and it's trying to renegotiate a facility I'm not sure that's a matter of public interest if they achieve it and move on."