Sydney, Feb 22 (IANS) Australia’s largest gold producer on Monday said it has settled a class action lawsuit brought against it by its shareholders who allege the company breached continuous disclosure laws.
Newcrest Mining Ltd. was alleged to have engaged in misleading or deceptive conduct by “providing production guidance without reasonable grounds” and breaching Australia’s continuous disclosure laws “by failing to inform the market of price sensitive information,” according to the class action that was to be heard in the court on February 29.
The 36 million Australian dollars ($25.7 million) payout only adds to the company’s bill for the breach of disclosure laws between late May and early June 2013 after the Australian Securities and Investment Commission (ASIC) fined Newcrest 1.2 million Australian dollars to settle a separate case on the matter in 2014, Xinhua reported.
Adding to Newcrest’s reputational damage, it was the largest fine ever placed on an Australian-listed company for breach of disclosure laws.
“The settlement is without any admission of liability by Newcrest and is subject to court approval,” Newcrest Ltd. said in a statement to the ASX on Monday.
“The settlement was agreed in the best interests of Newcrest shareholders to enable the company to focus on improving returns for shareholders without the risk, distraction and significant expense of a lengthy trial.”
The class action was brought by family trustee company Earglow on behalf of those who bought Newcrest shares between August 2012 and June 2013, centred on a series of allegations the miner firm selectively briefed analysts in the days before the company announced a five to six billion Australian dollars in write-downs.
It was alleged Newcrest made misleading or deceptive statements in 2012 and 2013 in relation to gold production and capital expenditure forecasts, allegedly artificially inflating its share price.
Newcrest subsequently commissioned an independent review of its disclosure practices and made changes to its investor relations procedures.
Newcrest’s shares have recovered most of its losses incurred from the disclosure scandal in 2013 to trade at 15.79 Australian dollars, down 11 Australian cents, or 0.69 percent from Friday’s close.