The Centro Properties decision and directors' duties in relation to accounts

The facts – mistakes in the accounts

In Centro Properties six non-executive directors and two executives at Centro Properties Group and Centro Retail Group (together, Centro) were found not to have to satisfied their financial reporting obligations (s 344 and 601FD(1)(f)) and their more general duties as directors (s 180(1) and 601FD(1)(b)).

The Federal Court found that:

• the 2007 Annual Reports failed to disclose:

– $1.5 billion of short-term liabilities – classifying them as non-current liabilities; and

– guarantees of short-term liabilities of about US$1.7 billion that had been given after the balance date of 30 June 2007; and

• there had been a failure to properly disclose $500 million of short-term liabilities that had been classified as non-current.