ASIC to probe Retail Food Group

 

The Australian Securities and Investments Commission (ASIC) has confirmed it is looking into whether the franchisor Retail Food Group (RFG) has failed to be transparent with investors.

The publicly-traded company has been making headlines last week after a massive rise in its share price prompted questions over whether a sell-off was in the works.

The company told investors last Monday it wasn’t aware of any information it had not announced that could explain the more than 70 per cent share rise, but just a day later a $160 million deal to recapitalise the company was announced.

RFG is under pressure to pay more than $259 million in debt after convincing its banks to stick around earlier this year. The company has previously said it was exploring options, including a possible sell-off of non-core assets.

The corporate regulator is looking into whether RFG breached its disclosure obligations after it told investors it was not aware of a forthcoming deal while, at the same time, saying discussions were advanced on a deal.

It is not the first time RFG shares have inexplicably risen prior to a major company announcement being publicised. Back in March, shares rose over 60 per cent in the week before the company announced it had renegotiated its debt facilities.

All this restructuring is a consequence of the fallout from a 2017 investigation into allegations of widespread franchisee exploitation within the company’s vast network of brands, including Donut King, Gloria Jeans, Michel’s Patisserie and Brumby’s Bakery.