Exclusive Content   Join Now

Aristocrat denies stock sale

Mar 11, 2003 5:48 AM

  Disputing a report that its top executives sold off company stock, Aristocrat Leisure says it is taking steps to bolster its bottom line.

Representatives for the Australian gaming company told the Nevada Gaming Control Board last week that it is pursuing credit and debt consolidation strategies to lift sagging revenues. Administrative cuts are also being implemented, officials said.

But Walter Stowe, vice president for legal and compliance, flatly denied last week’s GamingToday story that two top execs had sold off shares of company stock.

"Des Randall and Mark Newburg have not sold any of their stock in Aristocrat. This ”˜unconfirmed report’ implies serious violation of the Australian Stock Exchange Limited and the Australian Securities and Investments Commission regulations,’’ Stowe stated.

GamingToday, which acknowledged that the stock sale account was unconfirmed, based its report on a highly placed source inside Aristrocrat. That source requested and was assured anonymity. No independent confirmation could be obtained.

On the day that GamingToday’s story was published, Aristocrat announced that Newburg, president of Aristocrat Technologies Inc., and two other executives were leaving the company.

Randall, the chief executive officer, assumed management responsibility for Aristocrat’s American business.

CNN and the Wall Street Journal, among others, reported that key shareholders have called for changes to the Aristocrat board and management since its share price started to slide last month.

Aristocrat shocked investors in February when it announced that it had lost a key South American contract for 3,000 electronic gaming machines, and followed that with a warning that its North American operations were trading below expectations.

It cuts its net profit target by $17 million, prompting a sell-off that slashed its market capitalization by some $800 million.

The Australian Securities and Investments Commission is currently conducting a full investigation into the timing and disclosure of Aristocrat’s financial reports.

Lou Dorn, chief of corporate security for the Nevada Gaming Control Board and the Nevada Gaming Commission, said his division is monitoring the probe.

"We’ll definitely be looking at it. We’re just waiting for the ASIC to complete its work,’’ he said.