RARE GOOD NEWS FOR SLATER AND GORDON AS ASIC CLOSES INVESTIGATION

RARE GOOD NEWS FOR SLATER AND GORDON AS ASIC CLOSES INVESTIGATION
ASIC has cleared Slater and Gordon of deliberately falsifying its accounts after a three-month investigation.

It stemmed from Slater and Gordon's high-profile acquisition of UK firm Quindell, which was a disaster for the Melbourne-based firm, which has lost 98 per cent of its market cap in two years.

The investigation centred on the accuracy of financial records and accounts of the company for the period between 1 December 2014 and 29 September 2015.

The focus was on whether those records and accounts were deliberately falsified or manipulated and whether the Company or any of its officers have committed offences.

"ASIC has stated in its correspondence that the information and evidence available to it following its investigation does not indicate that there was a breach of law and it will not take any enforcement action," says ASIC in a statement today.

It is a rare piece of good news for the embattled company, and today, it is trading up 27.27 per cent at $0.14 per share following the news.

While the ASIC investigation is over, rival law firm Maurice Blackburn is continuing its plans for a class action against Slater and Gordon, claiming that the company breached its continuous disclosure obligations.

ASIC's finding could reportedly help Maurice and Blackburn's case, because if the corporate watchdog found there was wrongdoing, the class action may have had to be restructured.

As it stands, Maurice Blackburn will still be able to pursue the separate civil charge of breaching continuous disclosure agreements, while potentially going after the firm's directors and associated third parties such as its auditors.

But there are doubts about how much money the action will be able to recover.

The Slater and Gordon senior management team and directors have all lost significant amounts of money and last week, the company announced that more than 94 per cent of its debt facility, including debt with Westpac, National Australia Bank and Barclays, has been shouldered by new secondary debt buyers.

The new senior lenders fully intend to implement a solvent restructure, and to work cooperatively with the company to enter into binding agreements.

The lenders are aiming to reset the company's debt structure to ensure a new sustainable level of debt and a stable platform for its future operations both in Australia and the UK.

Business News Australia

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