GIO Class Action
Between August and November 1998 GIO, its directors and Grant
Samuel & Associates made statements to GIO shareholders in the
course of defending a hostile takeover led by AMP Limited. The
Statements were made in a formal report called a "Part B
Statement", and also in various other public statements in
newspapers. The shareholders were advised to reject the takeover
offer of $5.35 per share and many did so. Six months later the
company suffered losses of $2 billion and the shareholders received
only $2.75 per share.
The GIO Class Action was initiated on 30 August 1999 against GIO
Australia Holdings Limited (now AG Australia Holdings Limited), its
former board of directors and Grant Samuel & Associates Pty
Ltd. The shareholders' case was that the statements were
misleading, deceptive and/or negligent.
The case was bitterly contested by the various Respondents and
the Federal Court made many important rulings regarding class
action law during the case. For the size of the claim, the
number of affected shareholders and the nature of the dispute the
case is recognised as a landmark by many shareholders, lawyers and
On 26 August 2003, the Federal Court approved a $97 million
settlement of the GIO class action which was at that time, the
largest settlement in Australian legal history. It represents
a landmark for improved accountability to small shareholders and
better corporate governance in Australia.
On 27 November 2003, the Federal Court made orders finalising
the list of shareholders entitled to participate in the class
action. The list comprises 22,051 shareholders, the vast majority
of whom are small investors. The group members received their
compensation by way of two payments in February and March 2004.