A group of disgruntled Multiplex shareholders are suing the Australian property developer for A$100 (£40 million) over delays to the troubled redevelopment of Wembley stadium.

The investors claim that Multiplex deliberately hid the true extent of the losses it would suffer as a result of delays and continued to raise fresh capital on the Australian Stock Exchange regardless of its financial woes.

The lawsuit, filed in the Melbourne Federal Court this morning, alleges that Multiplex directors knew from August 2004 that problems with the Wembley project would dent profits but did not inform the market until the following May.

It is claiming damages on behalf of shareholders who lost money when Multiplex stock plummeted after the group eventually announced it expected to make an A$45 (£18 million) loss on the project in May 2005.

This morning Multiplex said it had not received notice of any proceedings against the company and declined to comment further.

According to a report in the Sydney Morning Herald, 45 private and institutional shareholders have already joined the lawsuit, which has been filed as a class action on behalf of anyone who held Multiplex shares during the period leading up to the crucial announcement.

Multiplex won the lucrative contract to re-develop Wembley National Stadium in September 2002 but the project has been hit with a series of delays and cost overruns as well as earlier legal action.

In June this year the UK High Court awarded Multiplex £5 million in a dispute with Cleveland Bridge, a steel contractor which abandoned its work on the stadium’s giant roof arch after a contract dispute. Cleveland Bridge later agreed to pay a further £17 million to settle outstanding claims but the win fell well short of the £45 million Multiplex had hoped to recoup from the legal action.

Other delays including questions over whether the right kind of contract had been used in the stadium’s foundations and problems with its retractable roof have bedevilled the Wembley rebuild, which is due to open in May 2007, more than a year late.

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