Super Retail says Ownership Matters and ACSI’s characterisation of the board’s actions relating to when the allegations against Heraghty first surfaced in late 2023 are “neither accurate nor complete”.
The board appears to be hiding behind an investigation by independent legal advisers that cleared Heraghty of wrongdoing.
“The board acted on the basis of that advice,” Super Retail said of the crucial decision to defend a legal battle that ended so catastrophically badly.
The allegations before the board at that time, which have since been made public through court documents, are astounding.
This includes the claim that the relationship between Heraghty and Kelly allegedly cascaded into the workplace via bullying claims by senior executives, alleged breaches of the Corporations Act, and a questionable board response to whistleblowers who were revealing the corporate turmoil.
Ownership Matters was particularly alarmed last year by claims that Kelly, who was made redundant in December 2023, had been re-hired as a consultant to recruit new board members, including a new chair. Recruits who would ultimately be the boss of Heraghty.
Ownership Matters founder Dean Paatsch asked: “When did the board know of a relationship between the CEO and the head of HR? Did the head of HR return as a consultant to advise the board on the selection of the new chair, non-executive directors or otherwise after the board had received whistleblower complaints about her relationship with the CEO?”
Former Super Retail Group chief legal officer Rebecca Farrell and former company secretary Amelia Berczelly at Federal Court hearings last year. Credit: James Brickwood
Super Retail still has not answered these questions, but its response to the proxy advisers did defend its decision to threaten Farrell and Berczelly with a defamation action over a statement released by their lawyers in April last year, soon after the retailer had flagged their legal claim.
The Super Retail response to the Ownership Matters report says this statement from Harmers “included serious allegations against the full board of directors that were adverse to the interests of shareholders”.
Given the cost is now almost certainly in the tens of millions of dollars for investors, and then there is the probe by the Australian Securities and Investments Commission under way, shareholders may want to make their own judgment on these serious allegations against the board, which was being led by Sally Pitkin at that time.
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That statement from Harmers Workplace Lawyers last year mentioned that Berczelly and Farrell were not the only former Super Retail employees to have approached them.
The company has not said whether it has settled any legal complaints with any of these other employees, but the Australian Financial Review revealed that another legal officer employed around the same time as Berczelly and Farrell has commenced action against the group.
One thing is clear, the fresh complainant will not face a legal campaign built on a clear strategy of relentless and costly litigation as Berczelly and Farrell did.
Berczelly alleges the retailer pushed her to the verge of suicide and bankruptcy as punishment for bringing to light allegations of an affair.
If Super Retail’s costly legal strategy succeeded in forcing a settlement before trial, Heraghty may have avoided a courtroom showdown. He would have avoided the legal scrutiny that appears to have forced him to reveal details that led to his abrupt sacking and the loss of millions of dollars in bonuses last month.
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