By Craig Zammit
ADELAIDE: The latest chapter in the unfolding court case involving Harris Scarfe and its previous auditors, PricewaterhouseCoopers (PwC), has seen trade creditors told the chance of receiving a large recovery of previously owed debts is steadily increasing.
However, as reported in an article in today’s Australian Financial Review, Harris Scarfe’s 4,500 shareholders have learnt of a significantly different fate, with little realistic hope held that they will receive any payments at all.
With debts sitting at approximately $150 million, Harris Scarfe is currently facing $73 million of damages from its main creditor, ANZ Bank, while Ferrier Hodgson is seeking $165 million damages from the retail group.
Of the $238 million of combined damages sought, $61 million will be made up from interest owed – $42 million from Ferrier Hodgson and $19 million from ANZ Bank.
The two creditors claim PwC failed to declare fraudulent manipulations of the Harris Scarfe accounts, which led to a $36 million overstatement.
Harris Scarfe currently operates 35 stores via the syndicate which purchased the ailing group in November 2001 – the unfolding events concerning Harris Scarfe relate to its previous incarnations, and do not refer to the business which is in operation today.