Maurice Blackburn, Australia’s leading class action firm, is investigating a claim against Bellamy’s Australia Limited (ASX:BAL) for alleged breaches of its continuous disclosure obligations and for allegedly engaging in misleading or deceptive conduct regarding its infant formula trade with China.
When the company eventually informed the market of its lower than expected revenue in December last year, the share price almost halved in a single day and Bellamy’s market capitalisation was slashed by over $500 million in the two trading days that followed.
Following a one month trading halt between 12 December 2016 and 11 January 2017, Bellamy’s shares resumed trading and suffered a further fall in value of 44% from $6.68 on 9 December 2016 to a low of $3.73 on 11 January 2017.
If you purchased shares in Bellamy’s between Thursday 14 April 2016 and Friday 9 December 2016 and held any of Bellamy’s shares until at least until 1 December 2016, you may be eligible to participate in this proposed class action and should register your details.
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.
There is good reason to suspect that Bellamy’s knew or ought to have known about its poor performance and the expected impact of the regulatory changes much earlier than when it ultimately informed the market. Our investigations will consider whether 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.
After the announcement on 2 December 2016, Bellamy’s share price dropped from $12.13 to $6.85. On 5 December 2016, the price dropped further to $6.56 at close of trading.
Figure 1 – Bellamy’s Share Price Chart
Our potential class action would be on behalf of shareholders who bought shares in Bellamy’s between 14 April 2016 and 9 December 2016 and held any of those shares until at least 1 December 2016. If Bellamy’s knew, or ought to have known, about the expected impact of the regulatory changes in China and it failed to adequately disclose this information, then investors who bought ordinary shares of Bellamy’s may have paid too much and should be compensated.
Funding and representation
Those eligible to participate in the class action will be asked to enter into a retainer with Maurice Blackburn. There is no cost risk associated with registering and participating in the class action. We will provide eligible registrants with our proposed retainer, which contains the terms of the legal representation agreement offered by Maurice Blackburn.
Negotiations with a litigation funder, ICP Capital Pty Ltd, are presently being finalised. Those eligible to participate in the class action will be asked to enter into a funding agreement with ICP Capital Pty Ltd. Should a sufficient number of Bellamy’s shareholders agree to instruct Maurice Blackburn and agree to receive litigation funding from ICP Capital Pty Ltd then a class action against Bellamy’s will be commenced in the Federal Court of Australia. Commencement of the class action will also be subject to Maurice Blackburn and ICP Capital Pty Ltd being satisfied as to the overall merits of the potential claim against Bellamy’s.
Register your interest in joining this class action
For further information, please email BellamyClassAction@mauriceblackburn.com.au or call 1800 285 179.
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 $2.4 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 secured shareholder class action settlements in excess of $100 million, which we have done five 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.