The Australian corporate regulator, the Australian Securities and Investments Commission (ASIC), has initiated legal proceedings against former Super Retail Group chief executive Anthony Heraghty, marking a significant development in corporate governance and executive conduct standards. The civil case, filed in the Federal Court in Brisbane, revolves around Heraghty’s failure to disclose a consensual but secret relationship with the company’s former head of human resources, Jane Kelly.
ASIC alleges that the undisclosed relationship, and Heraghty’s continued involvement in matters concerning Kelly’s supervision and remuneration, represented a serious breach of his duties as a director. The regulator claims Heraghty did not exercise proper care and diligence under section 180 of the Corporations Act, and that he provided misleading or incomplete information to the board and the market under section 1309, by omitting material facts about the relationship. ASIC contends this created foreseeable risks, including reputational harm, potential litigation, regulatory scrutiny, and negative impacts on shareholder value.
The case also touches on a broader governance and disclosure issue, potentially setting a precedent regarding how personal relationships within corporate leadership circles must be managed and reported. ASIC Chair Sarah Court emphasized that the focus is not on the relationship itself but on whether relevant parties were informed appropriately and if the secrecy caused material harm to the company.
Super Retail Group, which owns brands such as Supercheap Auto, BCF, Rebel, and Macpac, was not named as a defendant. However, the matter reignited attention to past controversies involving the company. Initially, Super Retail defended Heraghty amidst whistleblower complaints and internal disputes, but later dismissed him after new evidence surfaced. The company ultimately settled legal proceedings initiated by former executives making allegations linked to the handling of the affair.
Heraghty has not yet filed a defence in the ongoing proceedings. The outcome may also have implications for his new role as chief executive of the Winning Group, a premium kitchen appliances business targeting the renovation market, potentially complicating the company’s plans for a future initial public offering.
Experts note that ASIC faces challenges in proving both the existence of the relationship and the causal link between Heraghty’s conduct and the alleged harm to Super Retail. The case draws parallels to ASIC’s previous actions against corporate leaders, such as the unsuccessful claim against former Star Entertainment CEO Matt Bekier, where courts ruled that directors were entitled to rely on management representations.
Overall, this legal action represents a potentially landmark moment in Australian corporate governance, signaling increased scrutiny of executives’ personal conduct and its impact on company transparency, governance standards, and shareholder interests.