Austal cooperating with Australian and U.S. investigators

Written by Nick Blenkey
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JANUARY 29, 2019 — Local media were last week reporting that federal officials were on site at shipbuilder Austal USA’s Mobile, AL, premises searching computers and employee desks. The company gave the local NBC affiliate this statement: “Austal USA is working with the U.S. Navy on an open investigation. We are unable to provide additional details due to the nature of the investigation. We are continuing business as usual, executing our existing and recently awarded contracts.”

Australian parent company Austal Limited (ASX:ASB) has been a little more forthcoming in two Australian Securities Exchange filings.

A January 24 filing said:

Austal Limited (Austal) (ASX:ASB) advises that it is assisting an investigation by ASIC [Australian Securities and Investment Commission] into market announcements by the Company with respect to earnings from its Littoral Combat Ship program.

Austal provided updates to investors about issues associated with margin pressure from that program in December 2015. After the completion of important preliminary shock trials and further examination of the program and its financials, the Company entered a trading halt on 30 June 2016 and provided an earnings announcement, investor presentation and investor conference call on 4 July 2016 with respect to a downward adjustment of revenue and Work In Progress.

Austal is fully co-operating with ASIC so that its investigation may be completed as soon as reasonably possible.

Austal cannot provide additional information at this time, but will update shareholders of any future developments.

Then in a filing on January 29, the company said:

Austal Limited (Austal/Company) (ASX:ASB) advises that further to its announcement on 24 January 2019 about an ASIC investigation into market announcements by the Company with respect to earnings from its Littoral Combat Ship (LCS) program, its USA division is assisting US regulatory authorities with separate but related open investigations and any associated legal processes in relation to the LCS program.

Austal USA is fully co-operating with the USA authorities so that its investigation may be completed as soon as reasonably possible.

Austal cannot provide additional information at this time, but will update shareholders of future developments.

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