By Roushni Nair and Sneha Kumar

(Reuters) - Australia's Super Retail Group said on Tuesday it has dismissed Chief Executive Officer Anthony Heraghty with immediate effect over his inadequate disclosure of a relationship with a former employee.

Heraghty failed to disclose a relationship with the company's former human resources chief Jane Kelly, rendering his prior declarations "not satisfactory", the retailer said in a statement.

The board has terminated his employment, rescinded his incentive entitlements, and launched a review into the broader business impact across brands including Supercheap Auto, Rebel, BCF, and Macpac.

Heraghty did not immediately respond to a Reuters' request for comment on LinkedIn, while Kelly could not be immediately reached for a comment.

Chief Financial Officer David Burns has been appointed as the interim executive head while the company searches for a permanent replacement.

"Our view is that this dismissal is unrelated to the operational performance of the business," said Johannes Faul, director at Morningstar.

Earlier in the day, shares of Super Retail fell as much as 7.1% to A$16.03 but recouped some losses to trade down 3%, as of 0329 GMT.

Faul noted that the stock currently appears overvalued, given limited expectations for further margin expansion.

The company's shares hit a record high last month after the Australian retailer reported a 5% increase in total sales for the first seven weeks of fiscal 2026 and declared a special dividend alongside its final payout.

While analysts welcomed the strong trading update, many argued the 12% surge in the share price was excessive and stretched the company's valuation.

Separately, Super Retail is facing legal action by two former employees who alleged they were harassed after raising whistleblower complaints about Heraghty's relationship with the former HR executive.

(Reporting by Roushni Nair in Bengaluru; Editing by Sumana Nandy and Sherry Jacob-Phillips)