ASIC ends Harvey Norman inquiry

Harvey Norman MalaysiaThe Australian Securities and Investments Commission (ASIC) has ended its inquiry into Harvey Norman’s financial reporting practices, in particular whether the electronics and furniture retailer should consolidate franchise stores as part of its accounting standards.

ASIC in March said it would review Harvey Norman’s financial report, which followed media reports that raised concerns over the level of disclosure about the group’s relationships with franchisees.

Harvey Norman at the time said those reports contained false statements and assumptions.

“We do not intend to make further enquiries with the company in relation to the matters raised, in particular whether franchise stores should be consolidated by Harvey Norman,” ASIC said in a letter to Harvey Norman on Tuesday.

ASIC also said its letter should not be construed as an assurance that its financial report complies with accounting standards and requirements, and it may review other financial reports as part of its ongoing surveillance program.

In August, the retailer said overseas stores had helped it achieve a record $448.98 million in net profit, up 28.8 per cent on the prior year, and that offshore business could account for more than half of his retail empire’s profits in five-10 years.

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