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May 8, 2012

PwC Australia closes on Centro settlement

PwC Australia is reported to be close to reaching a settlement on a case brought against the audit firm and owner of former client Centro, according to Australian media. 

The alleged A$200m ($209m) agreement, which is believed to represent the largest settlement ever reached in an Australian shareholder class action, involves shopping centre company Centro, directors and its auditor at the time PwC. The auditor might pay up to a third of the amount, the Sydney Morning Herald reports.

The class action against Centro and PwC was filed by two sets of shareholders seeking damages for one of the largest accounting failures in Australian corporate history.

In a hearing before judge Federal Court judge Michelle Gordon last month, PwC admitted negligence but not liability in relation to a $1.1 billion short-term loan that had been misclassified as long term, causing the then second largest shopping centre company in Australia to nearly collapse. Centro only revealed its difficulties in refinancing this debt in December 2007.

PwC Australia did not respond to an International Accounting Bulletin request for comment.

Last month, the firm reiterated a statement it issued prior to the court proceedings that said the claims were “misconceived”.

 

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