On 16 May 2014 the parties to the Leighton class action signed a conditional deed of settlement for the amount of $69,450,000.
The Federal Court of Australia made orders which required anyone who was not a funded group member to register online by 18 July 2014 and submit a statutory declaration confirming their trade data by 1 August 2014 if they wished to be assessed for compensation. Maurice Blackburn was contacted by well over 6,000 shareholders seeking compensation.
On 25 August 2014 the Federal Court of Australia made orders approving the proposed settlement. We expect to distribute the settlement by the end of calendar year 2014.
It is no longer possible to register to receive compensation from the Leighton class action.
Background to the Leighton class action
On 30 October 2013 Maurice Blackburn filed a class action in the Federal Court of Australia on behalf of shareholders of Leighton Holdings Limited (Leighton) to recover losses suffered as a result of alleged non-disclosure and misleading or deceptive conduct by Leighton during the period 16 August 2010 and 11 April 2011.
On Monday 11 April 2011, Leighton announced a projected $427 million full year loss for the 2011 financial year (FY11) driven by more than $1.1 billion in write-downs relating to two major construction projects, the Brisbane Airport Link project (BAL Project) and the Victorian Desalination Plant project (VDP Project), and a Dubai based property construction joint venture, the Al Habtoor Leighton LLC (Habtoor Leighton).
On 14 February 2011, Leighton had forecast a FY11 full year net profit after tax (NPAT) of $480 million. Therefore, the result announced on 11 April 2011 was $907 million less than had been forecast two months earlier. On the first trading day after the 11 April 2011 profit write-down Leighton's share price fell by about 13.9%.
The class action alleged that in the period 16 August 2010 to 11 April 2011, Leighton had:
(a) failed to disclose that there were material matters arising either individually or collectively from the BAL Project and VDP Project and likely impairments on the Habtoor Leighton investment which made it likely that Leighton would not achieve its profit forecasts for the 2011 financial year; and
(b) made statements that misled or deceived shareholders about the profit forecasts and performance for the 2011 financial year and performance.
The Applicant claimed that this conduct was in contravention of the continuous disclosure rules of the Australian Securities Exchange (ASX), the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission Act 2001 (Cth) and the Australian Consumer Law.
Litigation funder International Litigation Funding Pte Ltd supported the class action.
Group members were defined as those who acquired an interest in ordinary shares in Leighton between 16 August 2010 and 11 April 2011 and who suffered loss and damage by or resulting from the alleged conduct of Leighton.
The settlement announced on 16 May 2014 does not relate to allegations of corruption affecting Leighton’s offshore operations. Maurice Blackburn is separately investigating whether shareholders may be able to bring a claim against Leighton in relation to corruption allegations which were publicly aired by Fairfax Media in October 2013.
Leighton share price - August 2010 to May 2011