Australia’s Centro Retail agrees to A$200 million settlement
10 May 2012
Shopping mall owner Centro Retail Australia and its former auditor PricewaterhouseCoopers (PwC) have settled a long-standing class action with its discontented shareholders in the federal court of Melbourne by agreeing to pay a total sum of A$200 million ($202 million) as compensation.
Centro Retail will put in A$85 million, while insurance proceeds will make up A$38 million and A$10 million will be paid by the now defunct Centro Properties Group. The balance A$67 million will come from PwC, the company said in a statement.
Centro Retail's contribution exceeds the A$65.8 provision the retailer had kept against the lawsuit in its half-year accounts.
On Tuesday, Centro Retail had requested the Australian Stock Exchange for a trading halt of its shares pending a settlement announcement on Thursday.
Melbourne-based Centro Retail is an Australian real estate trust engaged in the ownership and management of shopping centres. It was formed through the reorganisation of Centro Property Group and Centro Retail Group in December 2011.
The company has $6.9 billion of shopping centres under its management with offices in Melbourne, Sydney, Brisbane, Perth and Adelaide.
The court proceedings commenced on behalf of thousands of shareholders who acquired shares in Centro Properties Group and Centro Retail Group, in 2007-2008. The company's directors were accused of not disclosing the company's over A$3-billion debt, an error committed by its auditors PwC.