This article is from the Australian Property Journal archive
LEND Lease's share price has soared to its highest level in more than 12 months, after it concluded its investigation into reporting irregularities by its construction subsidiary Abigroup.
Abigroup executives were stood down in September when it emerged the company had misreported profits and losses on road projects in Queensland and Victoria, potentially affecting the Lend Lease’s FY2012 results and outlook for 2013.
Lend Lease said no systemic issues were identified in the investigation, which was led by auditor KPMG alongside Lend Lease, with input from PricewaterhouseCoopers, Evans & Peck and Hinds Blunden.
Lend Lease’s share price rallied at the news, up 4.15% to $8.53, its highest level since August 2011.
The group’s stocks had fallen to as low as $7.80 when Abigroup’s accounting discrepancies were revealed, prompting analysts to question whether there were widespread issues within the company.
Lend Lease CEO Steve McCann said the group would implement additional controls and process movements within Abigroup, and would make personnel changes “as appropriate”.
Senior executives including Lend Lease’s Australia Construction managing director Peter Brecht, infrastructure chief financial officer Darrell Hendry, Abogroup’s managing director David Jurd and chief financial officer David Walker were suspended over the accounting errors.
Lend Lease found accounting irregularities in regards to the extent of profits from the D2G joint venture carrying out an upgrade of the Ipswich Motorway in QLD.
Accounting issues were also recognised regarding anticipated loss for the Peninsula Link Project in Victoria, leading to concerns that these weren’t adequately recognised within the group’s results and forecast.
Property Review
