|Shareholders set to take legal action against Leighton over alleged failures to properly report a $907 million turnaround in financial performance.
Law firm Maurice Blackburn on Thursday said it intended to launch a class action against the company, alleging Leighton breached continuous disclosure obligations as set out in the Corporations Act.
On April 11 this year, the Leighton announced it was expecting to post a loss of $427 million for the 2010/11 financial year, a turnaround from a $480 million profit in 2009/10.
The announcement came after a review of its operations, which led to a $282 million drop in profit from its desalination plant project at Wonthaggi in Victoria, a before-tax loss of $430 million on the Brisbane Airport Link and a $295 million write-down on its equity in the Middle East-focused Habtoor Leighton Group.
Maurice Blackburn principal Andrew Watson said Leighton should have told the market about those write-downs by November 2, 2010, or, at the very latest, February 14 this year.
'Shareholders expect a company like Leighton to have proper risk management and internal reporting systems to ensure timely announcements are made when there are difficulties,' Mr Watson said.
Maurice Blackburn says it believes Leighton was seeking approval for design changes on the Brisbane Airport Link because of expected delays as early as April 2009.
Leighton also advised the market that construction of the Victorian desalination plant was on time at least five times between November 2010 and March 2011, Maurice Blackburn alleges.
In response to a query from the Australian Securities Exchange (ASX) several days after its announcement of the losses, Leighton said it informed the market of its expected losses as soon as it was aware of them.
'At all times, the company has been mindful of its continuous disclosure obligations,' Leighton secretary Ashley Moir said on April 18.
Last week, the Leightonboard terminated the contract of chief executive David Stewart, who took over from long-time chief executive Wal King in January.
That followed chairman David Mortimer's decision to depart the Leighton board a day earlier.