this article concerning centro would seem to have some relevance for ozl - maintain the rage!!!! michelmore, cusack, hegarty et al need to be brought to account otherwise it will happen again maybe not at ozl but somewhere else - i think imf will be cheered by this -
Duty breach claim: ASIC targets Centro IAN MCILWRAITH October 21, 2009 - 9:50AM
Australia's corporate watchdog has launched legal action against eight directors and executives of companies in the Centro shopping centre group, claiming their 2007 accounts failed to correctly classify more than $2 billion of debt.
The Australian Securities and Investments Commission revealed this morning that it is seeking to have the men disqualified from being able to manage companies, and wants them fined by the courts.
Those in ASIC’s sights include several high-profile Melbourne directors including Centro Properties’ former chairman, Brian Healey, its departed chief executive, Andrew Scott, as well as Paul Cooper, the group's current chairman.
Centro, which has more than 20 centres in Victoria alone, found itself in financial difficulties in late 2007 because it struggled to refinance the massive debts taken on to fund a major US shopping centre group purchase.The company’s search for long-term finance coincided with the beginnings of the global financial crisis when bank lending began to dry up.
In a statement this morning, ASIC said Mr Healey, Mr Scott, former directors Sam Kavourakis, Peter Graham Goldie and Louis Peter Wilkinson, along with two current directors, Paul Ashley Cooper and James William Hall, and Centro’s then chief financial officer, Romano George Nenna "failed to discharge their duties with due care and diligence".
The regulator said that the financial reports of Centro properties, Centro Property Trust and Centro Retail Trust for the financial year to June 30, 2007, "contained material misstatements".
"Specifically, a significant amount of interest-bearing liabilities of each of the relevant entities were wrongly classified as non-current liabilities, rather than current liabilities," ASIC’s statement said.
That meant that in Centro properties and Centro Property Trust, more than $1.5 billion of liabilities which were due to be either repaid or refinanced within the year, appeared on the companies’ balance sheets as long-term debt.
The effect of incorrect classification is that Centro’s accounts indicated, under ASIC’s measures, the amount of debt the company had to refinance within the year was half of what it actually had to persuade banks or others to lend it.
In the case of Centro Retail trust, almost $600 million of liabilities should, said ASIC, have been treated as current.
