Construction giant Leighton is close to reaching a multi-million dollar settlement of a shareholder class action against the company.
Leighton has confirmed the parties involved in the case are in advanced stages of settlement negotiations, after reports a $70 million settlement pay-out was to be made by Leighton.
The class action relates to events in April 2011, when Leighton announced it expected to suffer a $427 million annual loss, down from its previous forecast of a $480 million profit.
Law firm Maurice Blackburn – on behalf of Leighton shareholders – accused the company of breaching corporate law requirements to immediately inform the market of information that materially affects the company.
Leighton’s share price plunged 14 per cent after the profit forecast downgrade.
The company said on Friday that a settlement had not yet been signed, and if agreement is reached the deal would still require court approval.
No mention was made of the potential value of a settlement, but Leighton did say it does not expect a settlement would have a material impact on the company.
The company is facing other legal challenges, including a class action related to allegations of corruption in the company.
Leighton holds its annual general meeting in Sydney on Monday.
The company is controlled by German group Hochtief – which in turn is controlled by Spain’s ACS – who are seeking to increase their stake in the company to more than 70 per cent.
Leighton shares were down 21 cents, or one per cent, at $20.69 at 1212 AEST.