Maurice Blackburn today announced that the Multiplex Group has settled claims made against it for a sum of $110 million including legal costs. The settlement came without admission of liability from Multiplex.
It is one of only three $100 million-plus settlements achieved under Australia's class action regime. The other two cases, GIO and Aristocrat were also run by Maurice Blackburn Lawyers.
After a four-year compensation fight for 120 individual and institutional investors, the Federal Court today approved the settlement.
Andrew Watson, Maurice Blackburn principal said: "This is a major win for the investors who alleged they lost millions when Multiplex failed to tell the share market about its losses on the Wembley Stadium and other projects between August 2004 and May 2005. Our individual and institutional investors are very pleased with the outcome."
"The compensation Maurice Blackburn has achieved on behalf of group members is 20 times greater than what those group members would have obtained had they accepted the settlement offer made by Multiplex under the Australian and Securities Investment Commission (ASIC) enforceable undertaking in 2007.
Mr Watson said it was a hard fought case which had established a number of important precedents.
Retired businessman and lead applicant in the case Peter Dawson said he was "elated" with the settlement.
"I lost a modest sum as a Multiplex shareholder so for me it's always been about the principle of highlighting corporate wrongdoing and improving corporate governance."
"The only way boardrooms will get the message is when little people stand up and say this is wrong and I was prepared to take a stand on this."
"It's been a tough fight but I've always had great confidence that the Maurice Blackburn team would see it through and get a good result. I think the $110 million is a good outcome and sends a message to companies and boardrooms about the need to comply with continuous disclosure laws," said Mr Dawson.
The Multiplex class action was funded by Singapore based International Litigation Funding Partners.
The other two Maurice Blackburn cases where shareholders settled for more than $100 million are GIO (settled in 2003 for $112million) and Aristocrat (settled in 2008 for $144.5 million).The firm is also running several other high profile class actions including one against 12 banks, Amcor/Visy and the bushfires class action.
Proceedings were launched in 2006 by Maurice Blackburn. The case was brought by Mr Dawson's company, P Dawson Nominees Pty Ltd and Fred Hart on their own behalf and on behalf of investors who purchased or acquired an interest in Multiplex securities during the period 2 August 2004 and 30 May 2005.
The Applicants alleged that from 2 August 2004 until 30 May 2005 Multiplex breached the continuous disclosure provisions of the ASX Listing Rules and the Corporations Act, and engaged in misleading or deceptive conduct, by not properly disclosing to investors and the ASX and all the information regarding the material cost increases and delays in the construction of the Wembley National Stadium, West India Quay and the Brisbane Airport Heavy Maintenance Hangar. The consequences of these cost increases and delays on the Multiplex Group earnings forecast were not communicated to investors.
Subsequent revelations about these matters in February and May 2005 led to dramatic falls in the share price.