Maurice Blackburn, Australia’s leading class action firm, has filed a class action against Bellamy’s Australia Limited (ASX:BAL) (Bellamy’s), in the Federal Court of Australia on behalf of the lead applicant, Peter Basil, (Basil v Bellamy’s Australia Limited FCA VID213/2017) for alleged breaches of its continuous disclosure obligations and for allegedly engaging in misleading or deceptive conduct regarding the growth prospects of the company and its infant formula trade (The Basil Class Action).
In-principle settlement reached
In November 2019, the parties reached an in-principle agreement to settle the class action, together with a related class action being conducted by Slater & Gordon, for $49.7m, inclusive of GST and costs. The agreement is subject to several conditions, including Court approval.
On 17 January 2020 group members will be sent a notice that will contain information about the proposed settlement (Settlement Notice).
Group members do not need to take any steps before the Settlement Notice is received. The Settlement Notice will contain detailed information about the proposed settlement, including information about group members’ rights in relation to the proposed settlement and any steps group members may need to take. A copy of the Settlement Notice is also available here.
Settlement Approval Hearing
The hearing of the application for Court approval of the proposed settlement will be held on 13 March 2020. Further information about the application and hearing is contained in the Settlement Notice.
If you have any questions about the proposed settlement please contact Maurice Blackburn on 1800 285 179 or by email to BellamyClassAction@mauriceblackburn.com.au
Who is part of the class action?
The class action has been brought on behalf of people who acquired shares in Bellamy’s during the period 14 April 2016 and 12 December 2016 and who, as at 13 September 2017, have entered into a litigation funding agreement with Investor Claim Partner Pty Ltd and ICP Capital Pty Ltd (ICP) (Basil Class Action Group Members). The right to register to participate in the class action closed some time ago. If you are not already registered you cannot participate in the proposed settlement.
If you are unsure whether you are a Basil Class Action Group Member, please contact ICP on 1800 262 600 or by email to BellamyClassAction@icp.net.au
There is another class action which has been filed against Bellamy’s; McKay Super Solutions Pty Limited (as Trustee for the McKay Super Solutions Fund) v Bellamy’s Australia Limited (VID163/2017) (McKay Class Action). Shareholders who have signed a funding agreement/retainer to participate in the McKay Class Action are not part of the Basil Class Action.
If you are a group member in the McKay Class Action please contact Slater & Gordon on 1800 071 827 or by email to firstname.lastname@example.org. Information regarding the McKay Class Action can be accessed at this link https://www.slatergordon.com.au/class-actions/current-class-actions/bellamys.
What is the Bellamy’s class action about?
Bellamy’s is an Australian producer and supplier of organic baby food and baby formula.
On 2 December 2016, Bellamy’s shocked the market with its announcement that its anticipated revenue for FY17 would be around $240 million, significantly lower than the $350 million that many analysts had predicted. A major reason for the lower than expected revenue was because of regulatory changes in China, which had resulted in lower than expected sales and an oversupply of infant formula.
After the announcement, Bellamy’s share price declined substantially. On 2 December 2016, Bellamy’s shares opened at $12.09 and closed at $6.85, a fall of approximately 43.34%. Bellamy’s shares were placed in a trading halt until 11 January 2017.
On 11 January 2017, while the shares were still in a trading halt, Bellamy’s provided a further market update which disclosed that because of lower than expected demand for Bellamy’s infant formula products it was required to make ‘shortfall payments’ to its key suppliers, where minimum volume commitments under manufacturing contracts had not been met, estimated to be $11million to $13 million per year.
Once the shares resumed trading on 11 January 2017 the share value fell again to $5.35. On 12 January 2017, Bellamy’s shares fell a further 17.76% to $4.40.
Figure 1 – Bellamy’s Share Price Chart
The class action alleges that Bellamy’s knew or ought to have known about its poor performance and the expected impact of the regulatory changes in China much earlier than when it ultimately informed the market. The class action alleges that Bellamy’s breached its continuous disclosure obligations, engaged in misleading or deceptive conduct, or made misleading statements, in contravention of the Corporations Act 2001 (Cth) and the ASX Listing Rules.
If Bellamy’s knew, or ought to have known, about the expected impact of the regulatory changes in China and failed to provide adequate, timely disclosure of this information then investors who bought ordinary shares of Bellamy’s during the Claim Period may have paid an inflated price for Bellamy’s shares and be entitled to compensation.
Maurice Blackburn’s class action record is second to none
Maurice Blackburn has Australia’s largest and most successful class actions practice, having recovered more than $2.6 billion for clients since the establishment of our class actions department in 1998.
We have run the nation’s largest class actions and secured the biggest recoveries in Australian class action history, including being the only Australian firm to have resolved listed securities class action settlements in excess of $100m, having done that seven times now.
We continue to conduct various shareholder class actions in line with our aims to provide greater access to justice and enforce Australia’s corporate governance standards.
Key Court Documents