ASIC sues former Super Retail chief over alleged governance failures

ASIC has sued former Super Retail Group chief executive Anthony Heraghty, alleging he breached his directors' duties and misled the board and the market.

The regulator alleges Heraghty failed to disclose and manage conflicts of interest from an alleged undisclosed relationship he had with a senior executive at the company.

Furthermore, ASIC said Heraghty continued to supervise the senior executive and participated in decisions affecting their employment, remuneration, incentives, rewards and redundancy package. He also took part in board and committee discussions of complaints and anticipated legal proceedings on the alleged undisclosed relationship.

ASIC said Heraghty provided information to Super Retail's board and the market, omitting information about the alleged undisclosed relationship.

"ASIC alleges Heraghty put himself in a position where his personal interests conflicted with his duties to Super Retail Group and that he failed to properly disclose and manage that conflict," ASIC chair Sarah Court said.

"The allegations in this matter raise important issues about governance, transparency and trust in the information provided to boards and the market."

ASIC alleges these matters exposed Super Retail Group to foreseeable risks of harm, including risks to its corporate reputation, complaints and litigation, regulatory action, costs, and harm to its share price and shareholders.

"This case is not about private relationships, but whether a director properly disclosed and managed conflicts of interest and met their duties to the company and shareholders," Court said.

"Trust and integrity underpin Australia's market and corporate sector, and it is critical that directors fully meet their obligations of transparency and accountability; where we consider they have failed to do so ASIC will not hesitate to act."

Providing misleading information to a company board of the ASX, can attract a maximum penalty of $1.56 million per breach for contraventions under the Corporations Act.