Harvey Norman’s long-time financing partner, Latitude Financial, is back in the spotlight after losing an appeal in the Full Federal Court over misleading advertising of its “60-month interest-free” payment deals.

The court found that Latitude and Harvey Norman failed to adequately disclose that customers needed to sign up for a Latitude GO Mastercard, which carried additional fees, including monthly account service charges and, in some cases, establishment fees. The appeal was dismissed as “barely arguable.” A penalty hearing is now pending, with likely outcomes including fines, adverse publicity orders, and costs.

Amid this legal turbulence, Latitude CEO Robert Belan has been quietly selling down shares. Director notices show Belan sold $293,257 worth of shares between September 12–18, following an earlier sell-down of $455,345 between September 5–11. Combined with smaller sales in May, June and July, he has offloaded nearly $904,279 worth of stock in just five months.

Belan, who stepped into the CEO role in April 2023, still holds 8.1 million shares, along with 1.1 million unquoted performance rights and 3 million options.

Despite the legal headaches, Latitude’s financial results suggest the company is in strong shape. For the six months ending June 30, statutory net profit after tax surged 341% year-on-year to $39.7 million, while cash net profit jumped 69% to $46.2 million.

The Misleading Campaign

What was promoted: Harvey Norman ads touted a 60-month interest-free, no-deposit payment plan.

What was hidden: Customers had to apply for a Latitude GO Mastercard, which came with ongoing fees not clearly disclosed in the advertising.