The Seven West Media Ltd (ASX: SWM) share price has lifted today. That’s despite revelations in The Age newspaper that the media company provided its executive Ben Roberts-Smith with a $1.87 million loan without informing shareholders or the market.
Roberts-Smith, a former special forces soldier and decorated war veteran, has been the subject of an inquiry into alleged war crimes and this week faced a fresh investigation into an alleged conspiracy to silence witnesses.
At the time of writing, the Seven West share price is trading at 51.5 cents each, up 3%. By comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) is 0.06% higher.
Let’s take a closer look at today’s exposé and their potential impact on the Seven share price.
Seven’s loan to Ben Roberts-Smith
According to the report, the loan was signed by Seven West Media director Ryan Stokes (son of major shareholder and chair Kerry Stokes) and was used to pay for Roberts-Smith’s private legal expenses.
These expenses include his defence against the war crime allegations and defamation proceedings against The Age and 60 Minutes – both owned by media rival Nine Entertainment Co Holdings Ltd (ASX: NEC).
Previously, the Australian Financial Review reported Kerry Stokes had provided Roberts-Smith with a loan in a personal capacity. It was also reported Mr Stokes was holding Roberts-Smith’s Victoria Cross medal as collateral. According to the report in the Nine paper, the loan was transferred from Seven West to the Stokes’ private business.
The revelation that company funds were used without disclosure to the ASX or possibly even other directors is not negatively impacting the Seven share price today.
The loan reports come after 60 Minutes aired allegations Roberts-Smith may have hidden evidence from investigators in his backyard.
What did Seven say?
In a statement to The Age, a Seven spokesperson said the loan was “repaid to Seven, and this is no longer a Seven issue. This is a private matter regarding an employee that Seven will not engage in.”
Seven West Media’s legal team is allegedly advising Roberts-Smith and his lawyers during this process.
According to the report, it is unclear why the loan was transferred from Seven West Media to Stokes’ business. It was taken off the company’s books at the same time as the COVID-19 crisis, which saw the Seven share price crash.
Seven share price snapshot
Over the past 12 months, the Seven share price has appreciated 722.58%. The company’s value hit a 52-week high of 59 cents a share after posting its half-year results for FY21.
For the six months ending 31 December, the company recorded a $116.4 million net profit, compared to a $48.6 million loss during the prior corresponding period (pcp). Revenue, however, was down 9.8% over the pcp to equal $644.2 million.
Seven West reported underlying group earnings before interest, tax, depreciation and amortisation (EBITDA) up 24.4% to $165.7 million. Group EBIT climbed 29.0% to $152 million, with underlying earnings per share (EPS) of 5.6 cents.
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