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 legal writers.
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.