Hey Guys Not good media news today, but what the heck, not unexpected.
THE Australian Securities & Investments Commission has widened its case against directors and executives of the Centro shopping centre group. The corporate regulator has accused them of failing to disclose a $2.8 billion debt guarantee used to purchase a $US5bn US shopping centre portfolio.
The move, contained in an amended statement of claim in a Federal Court action in which ASIC has brought a civil claim against eight directors and officers, accuses them of not including the off-balance sheet guarantee in notes to 2007 company accounts.
The debt guarantee was given to Centro financing vehicle Super LLC in July 2007, after Centro had finalised its June 30 balance sheets.
ASIC, which is understood to have become aware of the guarantee through discovery, sought leave to amend its claim yesterday at a Melbourne hearing at which judge John Middleton set a trial date for April 4 next year.
Justice Middleton also set an August 22, 2011 trial date for the two Centro shareholder class actions.
The loan guarantee was for Centro's early 2007 purchase of the New York-listed New Plan Excel Realty Trust, a REIT controlling almost 470 shopping centres across 38 states of the US.
The purchase, worth $6.2bn including debt, was the trigger for Centro's near-collapse at the end of 2007, when the property owner and manager revealed to the market that it was unable to refinance $3.9bn of debt.
In October last year, the corporate watchdog launched proceedings against the Centro directors and officers, alleging they failed to discharge their duties with due care and diligence in approving 2007 financial reports.
They include current Centro Properties Group chairman Paul Cooper, who has stayed on to become one of the architects of plans for either an orderly sell-down of the company, or a recapitalisation of the group.
ASIC, which wants all charged disqualified from managing companies, and fined, claimed the 2007 financial reports wrongly classified about $2.6bn of interest bearing liabilities as non-current.
Yesterday's Centro hearing was the first for Justice Middleton after he recently took over the case from Justice Ryan, who plans to retire next year.
In a personal disclosure, Justice Middleton revealed a company that managed his superannuation fund held units in a Centro property syndicate controlling the Sunshine Marketplace retail complex in Melbourne's west.
CER Price at posting:
23.0¢ Sentiment: None Disclosure: Held
