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Harvey Norman (ASX:HVN) has flagged it may appeal a Federal Court decision that favoured with ASIC’s view the retailer owes penalties for breaching ASIC laws.
The financial regulator is involved due to the nature of Harvey Norman’s conduct in this latest case.
But first, for those possibly confused – this case is different to the class action against Harvey Norman brought by Echo Law for offering dodgy warranties.
Nor does it relate to the second class action for the same thing brought by Maurice Blackburn.
Notably, when news of that second class action dropped, Harvey Norman shares actually climbed +1.2% in morning trades the day it came out (September 20).
But no, this relates to a third case on the multi-billion market cap retail stock’s plate. (To be fair, it’s been going on for 2 years.)
This case relates to a Federal Court finding brought by ASIC in mid-October against Harvey Norman that it and third party finance entity Latitude offered fraudulent 60 month interest free guarantees.
To be eligible for the advertised “60 month interest free” window, consumers – who didn’t find this out until they were in-store, and couldn’t have figured it out even after reading smallprint – had to purchase a GO Mastercard.
That required customers to pay an establishment fee, and then recurring account management style fees. In other words: that breaches the claim the company was offering 60 months interest free. Cue ASIC’s involvement.
All in all, Harvey Norman on Tuesday provided the ASX with a copy of a court declaration it had received from the Federal Court where Justice Yates of the Federal Court noted Harvey Norman has 15 days from today to appeal proceedings.
The ultimate outcome will be a financial penalty for the company, charged by ASIC itself.
“The Company will consider its position carefully before deciding whether to make an appeal,” Secretary Chris Mentis wrote to ASX compliance.
Worth noting is that isn’t necessarily an outright challenge to the findings. Harvey Norman expects any hearing determining penalty size to be scheduled after mid-May, 2025.
Similarly to what happened in September, it appears shareholders mightn’t be too fussed.
Stocks were only down -0.65% in afternoon trades on Tuesday.
HVN last traded at $4.53.
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