Australia's corporate watchdog has warned all listed companies to adhere to continuous disclosure laws after securing an enforceable undertaking from Leighton Holdings over its $900 million earnings downgrade last year.
The Australian Securities and Investments Commission (ASIC) slapped Leighton with three penalties totalling $300,000 for contravening the law over continuous disclosure after the April 11 downgrade pushed the company into a $427 million loss, sending its share price sharply lower.
The regulator also secured a forward-looking enforceable undertaking from the construction and property giant and said all company directors should note the monitoring regime that will be imposed on Leighton over the next three years.
An independent consultant would assess Leighton's current disclosure practices, compare them to best practice, make recommendations and monitor the disclosure practices of the company, ASIC chairman Greg Medcraft said.
"What we've done here is address the immediate issue as soon as possible but also (be) forward looking," he told AAP in an interview on Sunday.
"It (disclosure practices) should be something that all directors should consider," he said, adding that ASIC would review Leighton's progress each year.
ASIC's eight-month exhaustive investigation into Leighton's market disclosures concluded last month when the last batch of company documents was delivered to the regulator.
An independent ASIC delegate then reviewed the evidence and determined Leighton had broken the law, but with the company's acceptance of infringement notices served, Leighton could avoid an admission of liability.
"From ASIC's perspective we have made a finding that there has been a contravention of the law," Chris Favundra, senior executive leader of ASIC's market integrity deterrence unit, said.
Leighton's April 11 downgrade came just two months after the company assured the market it expected a net profit of $480 million.
ASIC found the content of Leighton's market disclosures to be wanting because the company delayed releasing material information.
At the time Leighton said it did not have enough certainty on the scale of the downgrade until its review had formally concluded with a board meeting on the morning of April 11.
"We say you announced positive news in relation to three material projects but you didn't announce any negative news in relation to it," Mr Favundra said.
"Our position is that once you've got a material project and you know it's gone bad and there's negative news on it you need to disclose it to the market if it is information which would affect the decision-making or price of the securities."