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Australian Ethical and United Funds Management in dispute
Australian Ethical Investments has again revised its forecast profit for the year ending June 30, 2008, pointing to a dispute with United Funds Management as one of the reasons for the downgraded outlook.
The company has now advised that the expected profit result for the year ending June 30, 2008, is approximately $1.64 million, compared to a profit result of $1.82 million for the previous corresponding period, a decrease of approximately 10 per cent.
In early July, Australian Ethical said it expected its profit for the year to be approximately 95 per cent to 100 per cent of the profit result for the previous financial year.
“The change in expectation is largely due to issues with the superannuation transition,” the group said.
From April to June this year, the group’s wholly owned subsidiary, Australian Ethical Superannuation, had been transitioning the outsourced administration of the group’s superannuation fund.
Australian Ethical is now in dispute with United Funds Management, its former fund administrator.
Australian Ethical said it believes United has “failed to provide the contracted service” and that it has valid claims for damages against United.
United is seeking payment of approximately $250,000 invoiced to Australian Ethical for services during the reporting period.
“Notwithstanding the dispute, and without any prejudice to [Australian Ethical’s] claims, [Australian Ethical] has decided to recognise as expenses the disputed invoices in its 2008 financial statements consistent with a conservative accounting approach,” a statement from the group said.
“Similarly, a liability for the disputed amount will be included on the [Australian Ethical] balance sheet. The approach of [Australian Ethical] will be reflected in Australian Ethical’s consolidated financial statements,” the group said.
Australian Ethical and United continue to discuss the claims and disputed invoices.
AUTHOR
Lucie Beaman
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