ASIC and the ASX should be all over Pacific Brands which today belatedly issued a formal profit warning
that leaked into the market yesterday when the stock plunged 6.8% or
18c to $2.45. The shares dived another 18c to a low of $2.27 this
morning but had recovered by lunch to be only 2c lower for the day at
$2.43.

If ASIC felt it necessary to fine AMP $100,000 for selectively briefing
analysts on a profit downgrade in 2002, they should throw the book at
Pacific Brands for yesterday’s effort. How on earth did the market get wind of the deteriorating earnings performance?

Who can forget the way Southcorp sacked their investor
relations boss Glenn Cunningham for selectively emailing analysts about
a poor 2000 wine vintage. The Federal Court ended up fining Southcorp
$100,000 and ASIC has a good backgrounder on that saga here.

One possible explanation is that Macquarie Equities released a teaser
for a report on Pacific Brands yesterday which The AFR today reported
including these lines:

The generally slower macro conditions have been felt across
all division. Underwear and hosiery has been hindered by continued
intense competition. Bedding has been hit by significant commodity
cost increases in foam… previously highlighted issues in outerwear and
sport don’t seem to have been resolved. And discounting remains in the
shoe market.

Pacific Brands chairman Pat Handley joined the AMP board on April
2, 2003, just a few weeks after it settled with ASIC. Surely he knows
how the system works.

We called the mobile of Pacific Brands investor relations boss
Katherine Cooper today but it went straight to voicemail and she didn’t
return the call before edition time. We’re not suggesting that she
selectively leaked the downgrade, but the information certainly seeped
out from somewhere inside the company.

Pacific Brands was floated at $2.50 a share in 2004 after its private
equity owners made about 400 per cent on their earlier purchase of the
business from the old Pacific Dunlop in 2000.

Therefore, investors in the float are once again underwater so CEO Paul
Moore has a lot of explaining to do. Perhaps another Pat Rafter and
Sarah O’Hare advertising blitz might do the trick.