• Register
Return to: Home > News > Australia’s Rural Funds Group takes on short seller with EY report

Australia’s Rural Funds Group takes on short seller with EY report

An independent investigation by EY into claims made by activist short seller Bonitas Research about Rural Funds Group has found them to be unsubstantiated. That conclusion has seen Rural Funds reach for its lawyers.

On 6 August 2019 Bonitas Research had selectively released a document about the financial position of Rural Funds Group. The claims were rejected by Rural Funds Management and an independent investigation conducted by EY has concluded that the assertions made ‘are not substantiated’. EY has further corroborated RFM’s initial response to Bonitas’ claims.

RFM has now instructed law firm Clayton Utz to begin proceedings against Bonitas Research for what it calls ‘deliberate and malicious publication’ which RFM claims ‘constitutes misleading and deceptive conduct in Australia’. The Australian Financial Review reports Rural Funds Group managing director David Bryant as saying he hoped to ‘send a message to anyone else that makes things up’.

Among the assertions made by Bonitas, that of fabricated rental income was, said EY, ‘not substantiated as the rent received and recognised in the financial statements agrees to the relevant accounting working papers, the executive rental agreements, invoices and amounts received’.

What Bonitas called the ‘largest nefarious transaction appeared as an undisclosed dividend recapitalization’ of RFM’s newly acquired cattle asset, J&F Australia, which included a A$30m special cash dividend. Again, EY noted that this allegation ‘is not substantiated as the A$30m payment was in return for J&F’s buy-back of shares and equivalent to the amount that RFM outlaid in its acquisition of the shares in J&F.

In fact, EY’s report finds none of the claims made by Bonitas to be substantiated. Published alongside the EY report, Rural Fund Group reported annual results to 30 June 2019, showing an 11.6 per cent increase in net profit to A$33.6m.

Top Content

    South Africa: sensing new opportunities

    It has been an interesting couple of years for the profession in South Africa. A number of high-profile scandals have brought the profession and the role of auditors into sharp public focus, brewing a distrust towards accountants and a large expectations gap. Joe Pickard reports.

    read more

    Ghana: a quest for consistency

    Ghana’s current economic profile would suggest a fertile landscape for purveyors of accounting services. But inconsistent approaches to compliance and application of standards – coupled with problems in the banking sector and consequent liquidity constraints – have created a challenging environment. Paul Golden writes.

    read more

    Drone technology: audit takes to the skies

    The movement towards a digitised era has already impacted the auditing profession in a number of ways, from blockchain to artificial intelligence. Now firms are taking to sky and using drone technology in their audits. Mishelle Thurai speaks to Big Four firms to find out more.

    read more

    SBC: a new alliance joins the market

    Jonathan Minter speaks to Paul Tutin, chair of founding firm Streets Chartered Accountants, about why the business and its European partners took the decision to launch their own association.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.