Harvey Norman’s billionaire executive chairman Gerry Harvey has spoken up about the swirl of rumors surrounding the company at a shareholder meeting at the Sydney Tattersalls club earlier today.
He gave a firm rebuttal to allegations that the retailer is guilty of avoiding taxes and obfuscating problem loans, saying recent reports have been started by a short seller looking to profit from the company’s misfortunes.
“He’s been trying to disrupt our company,” Harvey said.
He called those looking to ask questions about the rumors “stooges” and asked them to leave the meeting.
“If you are here, please get up and piss off!”
“There are no franchise bad debts,” insists Harvey. “Harvey Norman pays every cent of tax it is obliged to pay”.
The retailer’s latest annual report detailed it had written off $566 million in loans to franchisees as “tactical support” since 2011.
“As to reports that Harvey Norman has loaned millions of dollars to franchisees to cover costs of rent, interest and franchise fees as well for funding inventory and then written off $566 million of it over five years, it was explained that these were not loans, but the amounts in question related to tactical support payments,” said the Australian Shareholders Association report about the meeting.
“We understand tactical support payments are temporary in nature and are expensed by Harvey Norman in the year that they are made. The franchisee takes this payment into revenue and uses in as they best see fit to running their business,” the report said.
