Harvey Norman rejects ‘false’ media report

Harvey Norman has hit out at Fairfax, saying a “false” article had helped drive an 8.2pc slump in its share price.

Gerry Harvey says he might buy more Harvey Norman shares today. Pic: Hollie Adams

Harvey Norman has hit out at the Fairfax press after a critical article over the weekend helped drive an 8.2 per cent slump in its share price yesterday.

It comes after the group’s chairman Gerry Harvey lashed out at short traders in an article published in The Australian this morning.

Mr Harvey claimed the retailer (HVN) had been the victim of a “potential scam” by local fund managers that had seen them work with alleged media allies to push the value of the company lower.

Yesterday’s market activity — which wiped $430 million from the group’s market cap — drew the interest of market regulator the ASX, which sent a “speeding ticket” the way of Harvey Norman following the heavy fall and a lift in volume to 3.2 times above the recent norm.

In the request for information as to the reason for the plunge, the ASX asked for particular comment on an article published in the Australian Financial Review that suggested an ASIC probe was underway into the company’s reporting of exposure to franchisee losses.

“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 said in response.

“The financial report of HVN for the year ended June 30, 2016 and the financial report for the half year ended December 31, 2016, each lodged with ASIC and ASX, are in accordance with the law.”

Harvey Norman shares rose as much as 4.3 per cent to $4.55 in early trade today.

Mr Harvey yesterday looked to reassure investors by buying $8.7m worth of shares.

He said further share purchases could be made today should the share price continue to tank.

“I obviously think it’s a stupid price … or else I wouldn’t have bought them,’’ he told The Australian yesterday.

“I don’t need any Harvey Norman shares, I’ve got plenty, but I’m very happy to have them and I might buy another two million (Tuesday).’’

While Mr Harvey was happy to wade into the market, fellow directors David Ackery and Katie Page have been sellers over the past week, offloading $1.5m and $1.1m worth of stock, respectively.

Yesterday’s performance served as Harvey Norman’s most dire session since December 9, 2011 and dragged the group’s shares to an eight-month trough.