Australian shipbuilder Austal is being investigated by an Australian government agency over market disclosures tied to its U.S. Navy shipbuilding program, according to a report in The West Australian.
The newspaper reported that Austal disclosed the probe, revealing it was assisting an investigation by the Australian Securities and Investments Commission (ASIC) into market announcements leading up to a warning of a $122 million annual loss in June 2016.
ASIC is examining market disclosures linked to a cost blow-out on Austal’s roughly $4 billion U.S. Navy shipbuilding program, the report said. The loss was blamed on soaring costs to build 11 Littoral Combat Ships for the Navy.
Austal, which builds the Littoral Combat Ships at its shipyard in Mobile, Alabama, said the Australian agency was investigating the December updates, according to the report. News of the loss followed earlier market updates that had warned of margin pressure on the program and triggered a steep drop in the company’s stock price.
The inquiry centers on disclosures made to investors in Australia, but it directly touches one of the Mobile area’s largest employers and a key supplier to the U.S. Navy.