The corporate watchdog ASIC (Australian Securities and Investments Commission) is investigating whether the troubled law firm Slater and Gordon “deliberately falsified or manipulated” its financial records.
The company was yesterday served by ASIC with two notices to produce documents relating to an ASIC investigation into the accuracy of financial records and accounts between December 2014 and September 2015.
“The ASIC investigation seeks to determine whether those financial records and accounts were deliberately falsified or manipulated and whether the company or any of its officers have committed offences,” Slater and Gordon said in a statement today.
“ASIC has stated that these notices should not be construed as an indication by ASIC that a contravention of the law has occurred and nor should they be considered a reflection upon any person or entity.”
Slater and Gordon says it will fully cooperate with ASIC.
The company’s shares have been on a steep slide, losing more than $2 billion in market value due to its underperforming UK business and British government plans to limit compensation for road accidents.
The shares closed at 26.5 cents yesterday, valuing the company at $93 million. Last year the shares hit a high of $8.07, valuing the world’s first stock exchange-listed law firm at $2.8 billion.
In August the law firm officially posted a widely expected annual loss of $1.017 billion as it rebuilds its business.
The result includes a $879.5 million non-cash impairment against the value of goodwill after its UK business earnings were worse than expected.
The company also faces a $250 million class action by disgruntled shareholders.
The shareholders allege there were problems within Slater and Gordon that extended beyond its acquisition in the UK of Quindell’s Professional Services Division.
Maurice Blackburn, which is running the class action, says there were multiple occasions that Slater and Gordon didn’t disclose material information to its shareholders in a timely manner.
Shareholder class actions typically take two to three years to reach a final hearing.