Australian shareholders and investors expressed shock and dismay over the failure of the Federal Court to impose penalties on six directors of Centro Properties Group despite violating corporate laws.

The Australian reported that the Federal Court's failure to impose penalties on most of Cento directors raised concerns over corporate governance standards in Australia.

Federal Court Justice John Middleton slapped a $30,000 fine against former Centro CEO Andrew Scott and banned former Centro CFO
Romano Nenna for holding a corporate management position for two years starting October 10.

The penalities were deemed a slap on the wrist compared to what the the Australian Securities & Investments Commission is asking.

No penalties were imposed against Centro directors, namely, former Centro chairman Brian Healey, current chairman Paul Cooper, James Hall, Sam Kavourakis, Peter Goldie and Louis Wilkinson.

Rob Wylie, Centro Chairman of the Special Matters Committee said in a statement on its website that it took note of the Federal Court decision.

"We look forward to Paul Cooper and Jim Hall continuing their contribution to the Board. As previously stated, the Board and management of Centro remain focussed on the critical task of restructuring in the best interests of all stakeholders," Wylie said.

The Australian, meanwhile, quoted Australian Shareholders Association chief executive Vas Kolesnikoff who said the Federal Court had "let down the entire community".

"Where people see highly paid executives and directors found guilty of breaking the law but there's no penalty, then it's no wonder the legal community is seen as out of touch," Kolesnikoff said.

The Australian likewise quoted that Australian Council of Superannuation Investors chairman Greg Medcraft who said the court decision "sent shockwaves" among the directors community.

"Directors in particular play an important gatekeeper role for our markets and they must not uncritically adopt the work of management on major issues for which they are responsible," Medcraft said.

"The key elements of the financial position of the company are things directors should understand and be able to communicate accurately to the market."

Online news agency www.news.com.au said Justice Middleton ruled in June that the Centro directors approved the annual reports of three related companies for 2006-2007 although the reports failed to disclose the $1.5 billion short term liabilities by classfying them as non-current or long-term.

The report added that the Centro directors also classified as non-current about $500 million of Centro Retail Trust's short-term liabilities.

Centro specialises in the ownership, management and development of shopping centres. Centro is Australia's largest manager of retail property investment syndicates.