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June 18, 2012

PwC to pay A$67m as court approves Centro settlement

An Australian court has approved an A$200m ($209m) settlement against the shopping centre company Centro and its former auditor, PwC Australia, the largest accounting firm in the country.

The settlement is the largest ever reached in an Australian shareholder class action.

Centro will pay the biggest part of A$133m and PwC will contribute A$67m.

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.

Melbourne court judge John Middleton said it approved the settlement as the proposals adopt the fairest and most reasonable approach to group members, taking into account the prospects of recovery and risks of continuing to litigate these proceedings.

In a previous hearing at the Federal Court in April, 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 reported revenue of A$1.43bn in the year to 30 June 2012.

 

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