Former Centro CEO Andrew Scott escapes boardroom ban but cops fine

Andrew Scott, the former CEO of shopping centre group Centro, has escaped a boardroom ban but must pay a $30,000 fine over his part in approving faulty 2007 accounts,  the Federal Court has ruled

Former Centro CFO Romano Nenna was handed a two-year boardroom ban but was not fined.

The outcome of the penalty hearing follows the Federal Court’s June finding that Scott and Nenna along with six non-executive directors had breached their corporate duties when approving the 2007 accounts.

The result will disappoint corporate regulator ASIC which had sought bans of three years for the two men and fines of $100,000 each.

It is also likely to anger Centro shareholders who will receive just 5¢ per share should a restructure of the business be approved in December.

Scott presided over Centro when its financial woes began in December 2007 after it ran into trouble refinancing about $1.3 billion in debt.

For the 2007 financial year, annual accounts show he was on a $3.5 million package.

He resigned as CEO in January 2008.

Lawyers for Scott and Nenna argued they had already been punished from the publicity surrounding the case.

The outcome of the hearing comes just two days after Centro revealed statutory net profits of $2.7 billion after preparing its accounts on a “one-off” liquidation basis.

Current Centro CEO Robert Tsenin says the restructure is “the only feasible prospect of delivering any value to security holders”.

“The alternative is likely to be external administration in which circumstances Centro security holders are expected to receive nothing”.

The judgment and penalties imposed on the former Centro directors may be subject to appeal.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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