Beauty retailer Mecca is facing an investigation from the Australian Securities & Investments Commission (Asic) after management announced that a $100 million dividend would be invested in the company’s “growth initiatives”.

According to the Australian Financial Review, Asic has launched an investigation into entities within Mecca regarding their compliance with financial reporting obligations.

The move is part of the corporate regulator’s broader crackdown on the financial reporting of large proprietary companies.

Last week, Mecca reported that revenues surged to more than $1.4 billion in the 12 months to December 31, while profits slid marginally to $111.1 million amid higher leasing and wage costs.

This was the first time the privately owned company has provided a full account of its operations.

The account also showed the company paid $110 million in dividends. However, a spokesperson later said the dividends would go to a “corporate entity that funds and invests in Mecca’s growth”.

Part of the money has been used for the development of Mecca’s flagship on Melbourne’s Bourke Street, as well as funnelled to its customer service campus in Richmond, the spokesperson added.

Mecca was founded in 1997 by Jo Horgan and her husband Peter Wetenhall, who are now the company’s co-CEOs. The company has one shareholder, which is a trust.

In response to Asic’s move, Mecca said its annual financial accounts had been audited before being lodged with Asic. The company admitted that the accounts have not always been filed on time.

“We have been in recent communication with Asic about these matters and, together with our auditors, have taken steps to address them,” a Mecca spokesperson said.