Construction giant Leighton says it will fight a class action filed by shareholders seeking to recover losses stemming from the company's massive profit downgrade in 2011.
Two years after it first proposed legal action, law firm Maurice Blackburn has filed a claim in the Federal Court in Sydney on behalf of those who invested in Leighton between August 2010 and April 2011.
The firm alleges Leighton breached continuous disclosure obligations, as set out in the Corporations Act, in that period.
It claims the company could have earlier informed the market of losses from its work on a Victorian desalination plant, Brisbane’s Airport Link motorway and its part-owned Middle East operations.
Leighton first informed investors of those issues on April 11, 2011, when it downgraded its forecast of a $480 million profit for the 2010/11 financial year to a $427 million loss.
Leighton shares lost 14 per cent of their value the following day.
“Leighton Holdings denies the claim and will vigorously defend the class action,” it said on Wednesday.
Maurice Blackburn class action principal Rebecca Gilsenan said the two parties would continue with settlement discussions, with a view to reaching a resolution for affected shareholders.
The class action is not related to recent allegations of corruption within Leighton, but Maurice Blackburn is continuing to investigate the company’s disclosure of those allegations.