November 15, 2017 / 11:04 PM / a year ago

UPDATE 1-Australia's Murray Goulburn reaches settlement with regulator

(Adds background, settlement details)

Nov 16 (Reuters) - Murray Goulburn said on Thursday it has reached a settlement with Australia’s corporate regulator over allegation that the company in 2016 misled farmers about the price they would be paid for their milk.

Under the settlement, the Australian Securities and Investments Commission (ASIC) will apply to the Federal Court for MG Unit Trust through its Murray Goulburn arm to pay a civil penalty of A$650,000 ($493,155) regarding the company’s disclosures under the Corporations Act between March 22 and April 26, 2016, the company said in a statement.

The settlement also stipulates that Murray Goulburn, a dairy foods company, will agree to the allegations and the proposed penalty.

Earlier this year, the Australian Competition and Consumer Commission alleged that Murray Goulburn cut the price it paid suppliers by 20 percent last year. The move angered farmers, who said the cut came so late in the season that they had little chance but to continue producing at a loss.

The ASIC has not alleged that Murray Gouldburn deliberately went against its disclosure obligations, the company said.

$1 = 1.3180 Australian dollars Reporting by Nicole Pinto in Bengaluru; Editing by Matthew Lewis and Leslie Adler

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