Things could be about to get a whole lot worse for the troubled discount retailer Harris Scarfe following the invitation of one Adelaide law firm for disgruntled shareholders to join a class action law suit.

Law firm Duncan Basheer Hannon is launching the suit on behalf of shareholders who feel they have been misled by statements released and signed off by the company directors.

Speaking to one Australian newspaper, Peter Humphries, a partner at Duncan Basheer Hannon, said: "The directors of Harris Scarfe have acknowledged serious financial irregularities over an extended period of years. Shareholders are entitled to rely upon the company's annual reports signed off by both the directors and auditors and any losses suffered by shareholders may well give rise to a claim for compensation."

The discount chain was forced to call in voluntary administrators earlier in the week after auditors discovered accounting irregularities.

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