Logistics giant Brambles is facing a new legal battle after Slater and Gordon filed a shareholder class action in the Federal Court of Australia on Friday.
Backed by global litigation funder IMF Bentham, the suit alleges that Brambles misled investors and wrongly withheld information it was required to disclose as a public company. Slater and Gordon said in April that it was looking at filing a class action against Brambles, saying the company may have cannibalised its own growth in fiscal year 2017.
Slater and Gordon said that since April, a large number of investors, who purchased Brambles equity between 18 August 2016 and 17 February 2017, have registered their claim. Affected shareholders can still register their claim.
The firm has received a lot of interest from both institutional and “mum and dad” investors in joining the class action, said Kaitlin Ferris, Slater and Gordon senior associate.
“Many of these shareholders have expressed their concern about Brambles’ conduct in the lead up to the 2017 downgrade announcements. These views are consistent with our investigations to date, which have revealed that there is a strong case to be made that Brambles misled the market and breached its continuous disclosure obligations,” she said.
“Today marks an important step in the proceeding, and we expect to appear before the Federal Court soon to seek orders for a timetable which will move the case along,” she added.
The claim contends that Brambles did not have reasonable grounds to issue the FY17 guidance it released in August 2016. The company made misleading and deceptive representations to the market, as well as breached its continuous disclosure obligations by not backtracking on its fiscal 2017 guidance.
“This case doesn’t only call into question Brambles’ statements about its future performance – when you look at what the company was saying when announcing its ‘exceptional’ FY16 results, and compare that with the explanation Brambles eventually provided for its poor FY17 performance, it’s clear that the market was misled about the quality of the company’s FY16 growth from the very beginning,” Ferris said.
Litigation specialists, funders hot for Australian action
Slater and Gordon defends Australia's class action regime