(Adds details on allegations, ASIC settlement)
Nov 9 (Reuters) - Dairy group Murray Goulburn Co-operative MGC.AX said on Friday it has reached a settlement in principle with Australia's competition regulator over a court case into allegations the company in 2016 misled farmers about the price they would be paid for their milk.
Murray Goulburn said the agreement with the Australian Competition and Consumer Commission (ACCC) was subject to approval by the Federal Court of Australia.
Under the settlement, the ACCC will seek a pecuniary penalty against former managing director Gary Helou, but will not seek a penalty against the company, Murray Goulburn said.
In April 2016, Murray Goulburn cut the milk price it paid suppliers by 20 percent in a move that angered farmers, who said the cut came so late in the season that they had little chance but to continue producing at a loss.
After a year-long investigation, the ACCC said that Murray Goulburn never indicated to its farmer shareholders of a potential risk to prices.
Late last year, Murray Goulburn also reached a settlement with the Australian Securities and Investments Commission where the company agreed to pay a civil penalty of A$650,000 ($493,150) regarding certain company disclosures.