Woolworths Facing Potential Shareholder Class Action
Tuesday 18 April 2017 @ 11.37 a.m. | Corporate & Regulatory | Legal Research
Australia’s leading class action law firm, Maurice Blackburn Lawyers, with support from litigation funding giant IMF Bentham, is proposing to run a shareholder class action on behalf of aggrieved Woolworths investors who suffered losses due to alleged breaches of disclosure obligations, particular in relation to the Masters Home Improvement Business and the resulting downgrade in profits to shareholders.
Background to the Class Action Claim
Subject to sufficient interest from affected Woolworths shareholders and the completion of further investigations, a shareholder class action run by Maurice Blackburn with the support of IMF Bentham is proposed against Woolworths on behalf of investors who acquired shares in Woolworths anytime between 27 November 2014 and 26 February 2015 and held at least some or all of those shares at the commencement of trading on 27 February 2015.
According to the Maurice Blackburn Class Action, the key dates for the class action were as follows:
- 29 August 2014 - Woolworths provides guidance that FY15 NPAT expected to increase 4% to 7%.
- 8 October 2014 - Woolworths was aware of significant risks to forecast profit.
- 21 November 2014 - Commercial Director of Woolworths Supermarkets instructs internal team to identify ways in which Woolworths could mitigate the risk that the supermarkets business would not meet its budgeted gross profit for the half year ending 31 December 2014.
- 27 November 2014 - Guidance emphatically reaffirmed at the Woolworths Annual General Meeting.
- 27 February 2015 - Woolworths Ltd (ASX: WOW) announced that it was downgrading its previously issued guidance of growth in its Net Profit After Tax (NPAT) of 4% to 7% for Financial Year 2015.
Maurice Blackburn principal Andrew Watson said:
"When corporations don't abide by the laws requiring they make timely and accurate market disclosures, these aren't mere technical breaches – it causes loss to shareholders, undermines the integrity of the market and distorts the efficient allocation of capital that could go to more deserving companies."
The proposed class action follows failed action against Woolworths by the Australian Competition and Consumer Commission in December 2015.
Woolworths has said, according to the Sydney Morning Herald, it had not been served with proceedings and would defend any action.
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