Harvey Norman says ASIC 'investigation' is a 'routine review'

Retailer Harvey Norman says it is complying with its obligations after it received a ''please explain'' notice from the Australian stock exchange. Photo/NZME

Harvey Norman's financial accounts are being reviewed by the corporate regulator.

Two days after the retail giant rejected a report that the Australian Securities and Investments Commission is reviewing its accounts for the 2015/16 financial year, Harvey Norman on Thursday said ASIC is undertaking a "routine review" of its accounts as part of the regulator's financial reporting surveillance program.

The latest statement from Harvey Norman comes after the company said it was contacted by ASIC on Wednesday evening and asked to make a clarifying statement about an announcement earlier in the week.

The company was last week asked by market operator ASX to respond to an article in The Australian Financial Review that claimed ASIC is reportedly reviewing how Harvey Norman reports its exposure to franchisee losses.

Harvey Norman said on Tuesday the article made false statements and assumptions, and made assertions and drew conclusions that were also false. The company said on Thursday it remains of the view that its financial report for the 2015/16 financial year is in accordance with the law.

It said ASIC was not investigating the accounts of Harvey Norman. Shares in Harvey Norman dropped eight per cent on Monday after the AFR article was published, gained three per cent on Tuesday after it rejected to the article's claim, and have dropped another three per cent in the past two trading days.

In a statement to the ASX late on Thursday night, Harvey Norman hit out at "further false statements" by AFR and The Sydney Morning Herald.

"In articles published by each of the Australian Financial Review and Sydney Morning Herald on 23rd March 2017, statements were made to the effect of, 'Harvey Norman admits ASIC is investigation its accounts' and 'Harvey Norman admitted its accounts were under investigation by the corporate watchdog'," the statement said.

"Each of the statements is false. ASIC is not investigating the accounts of Harvey Norman."