By Mark Hawthorne and Catie Low
Organic infant formula producer Bellamy's Australia has asked the Australian Stock Exchange to suspend its shares immediately leaving its shareholders in limbo for another week.
The suspension leaves tens of thousands of mum and dad investors unable to sell their stock, which has plunged from as high as $16.50 about 12 months ago to just $6.68 on Friday before the stock went into a trading halt.
That fall wiped more than $500 million from the value of Bellamy's stock.
Under ASX listing rules, a voluntary suspension means that no trading in the stock can take place and all existing buy and sell orders are automatically "purged".
Bellamy's Australia says its only 6 months into an 18 month turnaround turnaround plan which is working. It is forecasting sales and earnings growth this year.Credit: Kate Geraghty
A company can only ask for a voluntary suspension if it is unable to meet its continuous disclosure obligations to the ASX, or if it's not in a position to make an announcement after a trading halt.
Bellamy's went into a trading halt on Monday after its share price had tanked over a 10-day period and a report in BusinessDay raised concerns over how far back its formula sales had been under pressure.
The sales dive has raised questions over how much the chief executive and board knew of the company's sales performance ahead of its December 2 business update announcement and whether Bellamy's has fulfilled its continuous disclosure obligations.
Bellamy's was not making any comment but it's requested the suspension run until normal trading on 21 December or the release of a company announcement.
Bellamy's Organic former Laura McBain (left) was shown the door this week.Credit: Paul Jeffers
The company said the suspension was "necessary for the company to manage its continuous disclosure obligations while it continues with a review in order to finalise an updated announcement on the impact of trading conditions on the company's expected financial results."
On Saturday, BusinessDay revealed confidential supermarket and pharmacy sales data showed Bellamy's market share plunged from 25 per cent of the domestic infant formula sales in April to just 12 per cent by October.
The decision to suspend trading will impact thousands of small investors, who have bought into the Bellamy's story. From a small, family-owned organic food company from Tasmania, Bellamy's became a giant of the Chinese infant formula boom.
Bellamy's has almost 17,000 shareholders who own a parcel of fewer that 5000 shares in the company. Of those, more than 11,000 people own fewer than 1000 shares.
More to come