Freedom Foods CEO Rory MacLeod resigns as board probes company’s finances

Rory MacLeod has stepped down as CEO of Freedom Foods as its board completes an investigation into the company’s finances.

Rory Macleod will step down from the position of CEO at Freedom Foods. Picture: Adam Taylor

Freedom Foods’ long-serving chief executive Rory MacLeod has resigned from the company as its board completes an internal investigation of its finances.

Mr MacLeod, who had been on forced leave, resigned from Freedom Foods on Monday night. His exit comes a week after chief financial officer Campbell Nicholas also resigned.

The company is in a trading halt after the board identified a series of accounting discrepancies and wrote down a further $10m of stock, bringing total inventory losses to $60m this financial year.

“The board of Freedom Foods Group Limited last night accepted the resignation of Rory Macleod as managing director and chief executive of the company,” chairman Perry Gunner said in a statement to the ASX.

“Mr Macleod has resigned from all board and executive positions. Further to the company’s statement to the ASX on June 25, Freedom Foods has engaged Ashurst and PwC to advise and assist with ongoing investigations into the Company’s financial position.”

Mr MacLeod, a former investment banker, has been at the company since 2003, initially serving as chief financial officer before becoming managing director in 2012.

Mr Gunner said last Thursday the company revised the writedown of its inventory from $25m to $35m, to reflect provisioning for obsolete and out-of-date stock and product withdrawals, bringing total stock writedowns to $60m. Mr Gunner said it identified the issue as it moved stock from five external warehouses to its own facilities.

The writedown angered investors, who asked why the board hadn’t acted sooner.

Mr Gunner said the board had relied on information, which he said had been audited, from the company’s employees and it was not the board’s job to complete a stocktake of Freedom Foods’ warehouses.

“There was an amount of stock that had been put aside for rework. On further examination of the possibilities of rework it became evident it was not practical or profitable to rework that stock, so we believe the appropriate decision is to write that stock off.

“Clearly this is very raw. We learnt a lot about this today and there are further investigations underway.”

Freedom Foods produces a range of allergen-free breakfast cereals, such as gluten free and dairy products and dairy billionaire Tony Perich has a holding of about 54 per cent in the company.