Finance Finance News Newcrest facing class action

Newcrest facing class action

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Australian goldminer Newcrest says it has been invited to enter discussions with the law firm Slater and Gordon over a potential shareholder class action.

In a statement to the share market, Newcrest says the class action was flagged in its financial report for the 2012-13 financial year.

“Newcrest advises that it has now received correspondence from Slater & Gordon stating that they are instructed to commence a representative proceeding (shareholder class action) in the Federal Court of Australia against Newcrest in relation to Newcrest’s market disclosure prior to Newcrest’s 7 June 2013 market release,” statement said.

The goldminer is facing an inquiry from the Australian Securities Exchange in the wake of claims it selectively briefed investment analysts about the health of its business earlier this year.

Newcrest’s disclosure practices have come into question after its share price collapsed in the days before it announced major job cuts and writedowns on the value of its assets.

The sell-off triggered claims Newcrest had passed on information to analysts before releasing it to the market.

An independent review by former ASX chairman Maurice Newman, commissioned by Newcrest and released in September, found there was no sign the company takes a “lax” approach to investor relations.

However, it recommended that company “tighten” its policies and procedures around disclosing financial information to the market.

In today’s announcement, Newcrest says no legal proceedings have begun.

“Newcrest has been invited to enter into confidential and without prejudice discussions in relation to these matters, failing which Slater & Gordon advise that they have been instructed to commence proceedings,” the statement said.

Newcrest says it is still considering whether it will accept the invitation to enter the discussions.

It says it will defend any legal action.

Newcrest’s share price edged up slightly at the start of trade on the share market.

At 10:15am (AEDT), it was 0.1 per cent higher on $7.70.