Threat of legal action over Wembley Stadium problems forces contractor to shell out US $25 million
Multiplex has agreed to pay compensation totalling US $25 million (£12.6 million) to shareholders to make up for losses made on the Wembley Stadium project and avoid a legal wrangle.
The move follows a threat of legal action in December by 45 shareholders, who claimed the company failed to keep them informed of the problems associated with the $794 million project.
Multiplex was investigated by the Australian Securities and Investments Commission (ASIC) on its disclosures relating to the project between June 2004 and December 2005.
The company won the contract to rebuild Wembley Stadium in September 2002. Cost overruns and problems with contractors delayed construction and caused heavy financial losses.
“We are pleased this agreement brings to a close the exhaustive investigations by ASIC and allows Multiplex to put this investigation behind us. This provides an effective mechanism to settle with investors in a timely fashion,” said Allan McDonald, chairman, Multiplex, in a statement.
“The board believes the agreement is the best outcome for all stakeholders given the enormous costs and management time and focus that would be required to defend what would have been one of the most complex disclosures cases heard before the courts.”
In the 22 months since that ASIC investigation began, Multiplex has made changes to its governance procedure and improved its disclosure practices. The company also introduced more robust risk management and review procedures.
Wembley Stadium was due for completion in August 2005, but hold-ups have led to events, such as last year’s FA Cup final, being rescheduled and played in Cardiff.
The 90,000 capacity stadium is now scheduled to open later this year.