Australia's largest gold miner Newcrest is preparing to fight a class action by shareholders hurt by a massive financial writedown in 2013.
The move comes a month after Newcrest was fined $1.2 million by the corporate watchdog for selectively providing market sensitive information to analysts.
Newcrest Mining downgraded its production forecasts and reduced the value of its assets by more than $6 billion on June 7, 2013, partly due to the significant fall in the gold price.
Law firm Slater and Gordon on Monday filed proceedings in the Federal Court in Melbourne on behalf of investors who bought shares in Newcrest between August 13, 2012, and June 6, 2013.
The claim alleges Newcrest had no reasonable grounds to issue its August 2012 gold production forecast, and misled and deceived investors leading up to June 2013.
Newcrest on Tuesday said it would "vigorously defend" itself against the claims.
The class action will seek compensation for "substantial" shareholder losses that allegedly resulted following the writedown, Slater and Gordon senior class action lawyer Ben Phi said.
Shareholders are also seeking compensation for the way Newcrest conducted itself well before the downgrade announcement.
"While our clients welcome Newcrest's admissions, we allege that these contraventions form part of a wider course of misconduct," Mr Phi said.
Newcrest has already admitted to withholding information about its gold production from the wider investment market in the week leading up to its June 2013 downgrade announcement.
Several analysts from investment banks were alerted to the downgrade in briefings during that week.
Share
