ASIC loved the Centro decision by the Federal Court on Monday and of course, the Centro directors who were found guilty didn’t like it.
But a big fan was litigation financier, IMF Australia, according to a bullish statement yesterday.
The IMF share price liked it, for a while, with the shares up 3c to $1.57, a rise of 2%, until a late fall saw them close down a cent at $1.53.
Publicly-listed litigation funder IMF and law firm Maurice Blackburn are leading the action on behalf of hundreds of investors seeking an estimated $200 million in damages due to alleged deceptive conduct and breaches of continuous disclosure obligations.
The allegations are levelled against Centro Properties Group, Centro Retail Group, and their auditors, PriceWaterhouseCoopers, and relate to conduct from August 2007 to February 2008.
"The Court’s decision provides further support for IMF’s clients in class actions currently before the Federal Court against CNP, CER and Centro’s former auditors, PricewaterhouseCoopers, in which compensation is sought for, among other things, losses allegedly caused by the misreporting of CNP’s and CER’s 2007 current interest-bearing liabilities," IMF reminded the market yesterday.
IMF said the Federal Court had recently revised the timetable for the hearing of the class actions, which will now commence on March 5 next year.
Before then the defendants in the ASIC case return to court in August for the penalties part of the proceedings.
Commentators reckon a fine and/or a disqualification from being a director for a period of time, might be the most logical penalty.
Maurice Blackburn also welcomed the Federal Court ruling.
"The Federal Court decision reinforces the class action case," senior associate Martin Hyde said.
Centro Properties said on Monday that a statement would be made later this week by the company on the result of the Federal Court action.
"It is important to note, however, that the critical task of restructuring Centro in the best interests of all investors remains the priority for board and management and today’s decision will not impact the progress being made on that front," the company said.
An announcement on the restructure of the Centro group is expected either tomorrow or Friday.
June 30 is apparently the deadline for the deal to occur, although there have been extensions on debt talks and other issues at Centro over the past three years.
