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The whistleblower complaints also made allegations relating to “expense claims incurred to further the affair”, including an international work trip. Kelly left the group last year.

Super Retail – which also owns Supercheap Auto, Macpac and BCF – denied the allegations in April when it flagged a potential $50 million lawsuit in a statement to the ASX.

“The board has conducted a review and investigations into these allegations,” the company said. “The board was supported by independent external advisers. The board’s review and investigations concluded that none of the allegations are substantiated.”

The legal battle began last week when Farrell, the former chief legal officer and company secretary, commenced proceedings in the Federal Court against Heraghty and chair Sally Pitkin following the termination of Farrell’s employment in May this year.

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A directions hearing on July 31 revealed that the parties are in dispute about whether a settlement was reached over the termination.

Farrell is seeking damages, penalties, compensation and an apology from Heraghty and Pitkin, who is stepping down as chair after the group’s October shareholder meeting.

Farrell is claiming to be a whistleblower who was allegedly bullied, harassed and sacked from her job after raising complaints of serious corporate governance breaches.

“The statement of claim is consistent with the allegations contained in our announcement to the ASX on 26 April 2024,” Super Retail Group said on Friday. “We do not accept the untested allegations that are set out in the statement of claim. As previously announced, Super Retail Group will vigorously defend the court proceedings in relation to these matters.”

Super Retail is due to announce its full-year results on August 22.

The result is expected to be a strong one. JP Morgan recently upgraded earnings forecasts for the 2025 and 2026 financial years with sales growth across all categories.

But the court proceedings represent a dark cloud over its outlook.

“Whilst the sales trajectory is expected to be resilient for the retailer, current court proceedings against the company by a former employee acts as an overhang for the stock, posing risk to key management changes and disruption to sales execution,” JP Morgan said.

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