AUSTRALIA’S largest gold miner is facing a class action from shareholders over its massive financial writedown.
Newcrest Mining in June downgraded its production forecasts and reduced the value of its assets by more than $6 billion, partly due to the significant fall in the gold price. In the days leading up to the announcement, three different analysts downgraded their investment views on Newcrest, causing a fall in the company’s share price.
The corporate regulator is investigating possible breaches of disclosure laws, due to speculation analysts were given market sensitive information before it was released to the wider investment market. Newcrest has denied it breached any laws, and an investigation it commissioned in July found no wrongdoing.
Law firm Slater and Gordon has now told Newcrest they have been instructed to commence a shareholder class action in the Federal Court against the gold miner, relating to Newcrest’s market disclosure ahead of its June writedowns. But before proceedings commence, the law firm has invited Newcrest to begin "confidential and without prejudice discussions" about the matter.
"Newcrest is considering its position in relation to this approach," the company said. If the company does not enter talks, the legal action will begin. "Newcrest intends to defend any proceedings if they are commenced," it said.