Centro on trial in major shareholder class action - Monday
2 March 2012
The biggest court case in Australia this year, to recover shareholder funds from Centro will begin this Monday, 5 March, in the Federal Court in Melbourne.
The trial begins at 10:15am, in courtroom 6K, presided over by Justice Michelle Gordon.
In 2008, Maurice Blackburn issued Federal Court proceedings on behalf of shareholders, alleging that Centro Properties Group and its listed subsidiary Centro Retail Group engaged in misleading and deceptive conduct by not disclosing the full extent of their known debts.
When the two companies eventually revealed the extent of their debts in December 2007 and admitted that they had been unable to refinance billions of dollars of debt that had become payable, their share prices fell dramatically.
It is alleged that Centro Properties and Centro Retail breached their obligations of continuous disclosure and that both companies engaged in misleading and deceptive conduct by failing to adequately disclose to their security holders and to the ASX: • the full extent of their maturing debt obligations; • the risk that they may not be able to refinance their maturing debts at forecast cost or at all; and, • the risk that there was no longer a reasonable basis for their respective profit forecasts.
Maurice Blackburn is also taking action against Centro's auditors PricewaterhouseCoopers (PWC) for failing to detect errors regarding Centro's debts in its financial accounts.
Martin Hyde, principal on the case, said the group members in the Maurice Blackburn Centro class actions comprise a broad range of investors who are seeking damages in excess of $200 million.
"Our clients range from individuals, some of whom lost their life savings on Centro, through to the largest financial institutions in Australia," Mr Hyde said.
"The actions of Centro in not disclosing known debts of around $5.7 billion to shareholders, is reflective of the cavalier corporate conduct that led to the global financial crisis.
"This is a serious failure of corporate governance and proper accountancy practices that has led to thousands of Australians suffering very significant losses."