The Australian Agricultural Company says neither of the board members with close ties with Joe Lewis' Tavistock Group in 2019 leaked privileged information to the reclusive British billionaire after huge North Queensland flood losses in February of that year.
The Bahamas-based majority AACo shareholder is alleged, by New York's Southern District Attorney's office, to have received confidential insider information about the "material financial losses" the beef business was suffering before the extent of the flood damage and stock deaths was publicly reported on February 11.
The charge is one of several alleged insider trading claims being made against the Tavistock Group's owner in an indictment by a US grand jury.
Mr Lewis is accused by district attorney, Damian Williams, of abusing his access to corporate boardrooms.
He alleged Mr Lewis "repeatedly provided inside information to his romantic partners, his personal assistants, his private pilots and his friends".
AACo has confirmed to the Australian Securities Exchange it was aware of the allegations and had sought legal advice relating to the US court action against Mr Lewis whose Tavistock Group owns almost 52pc of the big pastoral and branded beef marketing business.
Mr Lewis, 86, who made his fortune in London's upmarket hospitality sector and currency trading ventures before building his global investment network, has denied the allegations.
The US attorney's office alleged that after widespread floods and cold wet weather hit AACo's Wondoola, Canobie, Dalgonally and Carrum stations between January 25 and February 14 in 2019 "members of AACo's board privately provided confidential information to Lewis about the financial losses AACo was expected to suffer" before the information was officially publicised.
The allegation is that on February 10, when AACo directors met to discuss the impact of the flooding and realised the losses were likely to be material, "a board member employed by Tavistock informed Mr Lewis of the expected losses and that AACo did not have insurance coverage for the cattle killed by the extreme weather event".
Tavistock had two directors representing Mr Lewis on the AACo board at the time, Dr Shehan Dissanayake and Neil Reisman, both of whom still hold directorships.
Mr Lewis was also allegedly told the federal government was not likely to cover any portion of the flood losses.
A statement issued by AACo the following day (February 11), confirmed Wondoola Station near the Gulf of Carpentaria was expected to record extreme losses among its 30,000 head composite cow and calf herd.
Lower death rates were also expected from the 50,000 mostly composite cows and their calves on the other three properties.
In the meantime, the US attorney has alleged Mr Lewis had shared the information with two of his pilots, advising them to sell their AACo shares before the extent of the flood damage became public.
The pilots apparently placed orders to sell their shares, but were unable to execute the trade in time before AACo released its update in Australia.
In last week's official statement from New York, headlined "British investor and billionaire businessman Joseph Lewis charged with insider trading and financial fraud", the district attorney said Mr Lewis faced 16 counts of securities fraud and three counts of conspiracy, for alleged crimes spanning from 2013 to 2021.
"My office ... has indicted Joe Lewis, for orchestrating a brazen insider trading scheme," Mr Williams said.
He accused Mr Lewis of "classic corporate corruption".
In response to the US legal proceedings the ASX asked AACo if any member of its board shared information to Mr Lewis or one of his representatives prior to the release of the February 11, 2019 flood update.
AACo has responded saying its inquiries with the two relevant board members who represent Tavistock, Dr Dissanayake and Mr Reisman, indicated neither had provided any information.
The company said based on the information available to AACo the answer to the ASX's question was "no".
"Enquiries are continuing," said company secretary, Bruce Bennett in a letter to the ASX.
AACo, which held its annual general meeting last week soon after the US allegations surfaced, said it was complying with ASX listing rules.
Brisbane-based AACo owns Australia's largest cattle herd - about 433,000 head - on properties spread over 6.4 million hectares in Queensland and the Northern Territory.
Tavistock Group has been steadily building its stake in the Australian business, breaking 50pc earlier this year.
In October last year Tavistock gained a third seat on the AACo board, when Sarah Gentry, a former AACo employee and now vice president of Tavistock's food, agriculture, health and technology interests replaced long serving director, Tom Keene.
Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
