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Centro seeks to ringfence class actions

This will allow the rest of the board and executive management to work on the retail landlord's day-to-day operations as it moves to repay its $6 billion-plus debts and restore investors' confidence.

Last month ASIC started action against two current and four previous directors, as well as two former executives of Centro, alleging they should have known the company incorrectly classified $1. billion in short-term debt as non-current liabilities in the 2007 financial reports for Centro and its listed spin-off, Centro Retail Trust.

Under the action, Centro's former chief executive, Andrew Scott, and former chief financial officer, Romano Nenna, also face claims they failed to sign off on the financial reports in their role as executives. Yesterday the group said the special matters committee would be made up of all non-involved directors to deal with the ASIC proceedings and consider corporate governance implications for Centro.

The decision to form the committee was aimed at showing independence from the rest of the business. Centro's current chairman, Paul Cooper, and director and audit committee head, Jim Hall, are named in the ASIC action.

But while the committee continues to deal with proceedings, investment bankers are making submissions to the newly created independent board of Centro Retail Trust to work on its separation from the associated Centro Properties group.

The process of unhooking the Centro trust from the manager, Centro Properties, would require much work, given the ownership structure.

Centro Properties owns 50 per cent of the trust and the two have joint ownership of many assets, as well as interests in other properties owned and managed by the various Centro MCS syndicates.

The assets include the flagship retail centres The Glen in Melbourne and Sydney's Centro Warriewood.