Five years of market reporting and disclosures by gold miner Newcrest Mining (NCM) will be probed in court if a class action launched by a listed law company makes it to court.
As was to be expected, Newcrest Mining says it will vigorously defend the class action lodged by listed law firm Slater & Gordon which is seeking damages in relation to the gold miners’ market disclosure performance in the 2013 financial year, especially leading up to the downgrade and billions of dollars of losses and write-downs announced in early June of the same year.
Newcrest has already settled for $1.2 million with the markets regulator, the Australian Securities and Investments Commission, over the events leading up to the announcement nearly 13 months ago.
But the claim lodged by Slater & Gordon in a Victorian court goes beyond the matters investigated by ASIC.
ASIC focused its investigations on a period between May 28 and June 7, 2013, when shares in the miner fell rapidly in advance of a gold production downgrade and the write-downs of more than $6 billion.
The Slater & Gordon’s claim goes back to five year guidance given by Newcrest in August 2012, when the miner reduced its 2017 gold production target from 4 million ounces to no more than 3.5 million ounces.
The class action claims that August 2012 production guidance was not reasonable, and claims that for 10 months from that date to June 2013 Newcrest misled the market.
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Newcrest yesterday stressed that ASIC’s successful investigation did not in any way relate to that August 2012 period.
"Newcrest intends to vigorously defend the proceedings,” the company said in a statement.
The class action is seeking to represent investors who owned Newcrest shares between August 2012 and June 6, 2013.
Newcrest shares last traded at $11.43 yesterday. That was a fall of only 3c, showing investors are not panicking at the news of the class action.
Slater & Gordon still have to get enough investors into the action to help finance the court case.
