RCR had ‘two sets’ of books, lawyers say after $40m settlement

afr.com:

Engineering group RCR Tomlinson had two sets of books showing different pictures of the company’s finances before it collapsed, lawyers Quinn Emanuel said after settling a long-running class action lawsuit for $40 million.

Quinn Emanuel partner Damian Scattini toldAFR Weekend that one reason the class action had taken so long to resolve was because the company had “operated two sets of books”.

Engineering group RCR Tomlinson had two sets of books showing different pictures of the financial state of solar projects. 

“I’m not sure that is quite kosher,” he said. The disparity in information that was publicly provided had “implications” for RCR’s insurance policies, Mr Scattini added. Lawyers also had to sort through two million documents.

The lawsuit was filed in the NSW Supreme Court in 2018, shortly before the engineering group went into administration, alleging breaches of continuous disclosure laws and misleading and deceptive conduct. It was settled this week.

The Pendal Group, Perpetual and Allan Gray were RCR’s top three shareholders at the time of collapse, collectively owning more than 30 per cent of the company.

The class action alleged that while RCR had systems to monitor the financial performance of solar contracts, which were supposed to be reviewed and reported on monthly, information relating to the contracts was not consistently recorded.

It alleged that forecast costs for projects recorded in RCR’s software system, monthly project reports and monthly management accounts did not match the forecast costs recorded in spreadsheets compiled by project managers.

The lawsuit cited emails from RCR project managers discussing solar projects. One email sent on January 16, 2018, relating to “Project Gretel” (which