Harvey Norman (HVN) co-founder and executive chairman Gerry Harvey believes he’s in a state of “war” with journalists making “absolutely untrue” assertions about his company’s financial accounts, following a market announcement last night that the corporate regulator is looking into the company’s finances.

Company secretary Chris Mentis told the ASX on Thursday evening that the Australian Securities and Investments Commission (ASIC) was conducting a “routine review” of HVN’s financial report for the year ended June 30 2016 as part of a financial surveillance program.

The announcement came after several days of media reports that cast a shadow over the nature of Harvey Norman’s financial reporting and relationships with its franchisees, as well as an Australian Stock Exchange (ASX) price query seeking clarification about an 11 per cent drop in HVN’s stock since March 17 and abnormally high trade volumes.

As part of that price query the ASX asked Harvey Norman to “specifically address” a claim made in the Australian Financial Review last week that ASIC was reviewing HVN’s reports, it’s exposure to franchisee losses and a $1.15 billion in franchisee loans.

In response company secretary Chris Mentis told the market that the AFR article “makes false statements and assumptions and then proceeds to make assertions and draw conclusions, which are also false, based upon those false statements and assumptions.”

Harvey Norman’s share price plummeted 6 cents on market opening this morning, trading at $4.29 by 10:18 AEDT.

Harvey maintains that the reports are in accordance with the law, telling Inside Retail yesterday afternoon that ASIC were not investigating Harvey Norman’s accounts, and that the “routine review” had nothing to do with recent media reports or the subsequent ASX price query. Company Secretary Chris Mentis later updated the market to the same effect.

“[ASIC] don’t want, and we don’t want, anyone to think there’s an investigation, because that then leads to someone suggesting that something is improper,” Harvey said.

“From our point of view there’s normal compliance with whatever regulators want, there’s absolutely nothing different to any other year.”

When contacted by other media outlets, ASIC did not confirm whether they were conducting a review or an investigation into Harvey Norman’s accounts.

Harvey did acknowledge the increase in trade volumes for HVN shares over the last week, saying that “there’s never been anything close” to recent activity and pointing the finger at short selling.

“The commentary has said it’s about Amazon and the general market, but that doesn’t stand up under scrutiny,” Harvey said.

“We found out this afternoon that our short position has jumped from 40 million shares to 54 million shares.”

Revealing that he purchased an additional million HVN shares yesterday, after purchasing two million earlier this week, Harvey remains adamant that the company has nothing to hide and that fund managers are welcome to ask him any questions.

“This is a couple of interested individuals stirring shit, and then it follows to a journalist that wants more information,” Harvey contended.

“I talked to 10 fund managers yesterday and went through it with them…I asked, ‘tell me, am I on the right track or not?’ They all agreed that I am,” he continued.

The sentiments echo Harvey’s bombastic assertion at the company’s Annual General Meeting, where he declared that there was a conspiracy to short sell Harvey Norman’s stock. He now says he’ll be moving to “bring some of these people to heel” in the coming months.

Media attention on Harvey Norman’s accounts have been ongoing for some time and largely centre around concerns about the  transparency of its accounting practices as they relate to franchisees.

In November last year, before the company’s AGM, proxy advisory firms Ownership Matters and ISS released contradictory recommendations to HVN shareholders about whether company accounts should be accepted.

The accounts were accepted by shareholders at the AGM, but since then the Australian Shareholders’ Association has called for Gerry Harvey to be removed as Harvey Norman’s executive chairman.

Inside Retail has contacted ASIC for further clarification.