Slater & Gordon shareholder class action
On 12 October 2016, Maurice Blackburn filed a class action against Slater and Gordon Limited (SGH) on behalf of persons who acquired an interest in SGH shares between 30 March 2015 and 24 February 2016.
As is well-known, shares in publicly-listed law firm Slater & Gordon (SGH) declined approximately 95% in price between April 2015 and February 2016, losing shareholders more than $2 billion in the process. Questions have been raised about SGH’s A$1.3 billion acquisition in the United Kingdom of the Professional Services Division of Quindell PLC – which was partly funded by a A$900 million capital raising from existing shareholders – particularly whether the company’s due diligence process was adequate and whether it provided shareholders with accurate and reliable information about the risks of the acquisition and its value to shareholders. Shareholders also suffered heavy losses when SGH abruptly withdrew revenue and earnings guidance only weeks after it was emphatically re-affirmed, and further losses followed when SGH released financial statements which not only suggest that the acquisition was under-performing, but also indicate systemic problems across the company as a whole.
Based on these and other issues, the Statement of Claim alleges that between March 2015 and February 2016, SGH made false and misleading statements, engaged in misleading and deceptive conduct, and/or breached its continuous disclosure obligations to shareholders which prevented shareholders from being able to make informed investment decisions based on complete, accurate, and timely information about the Quindell acquisition and the true state of the company’s overall financial position and performance. It is alleged that by this conduct SGH contravened various provisions of the Corporations Act 2001 (Cth), ASX Listing Rules, the Australian Securities and Investment Commissions Act 2001 (Cth), and the Australian Consumer Law, and that these contraventions caused the price of SGH shares throughout the period to be higher than would have been the case had the true state of affairs been known to the market. It is also arguable that, had the real risks and true value of the Quindell acquisition been adequately disclosed, SGH would not have been able to conduct the A$900 million capital raising, and the transaction would not have taken place.
Maurice Blackburn is seeking compensation for shareholders who purchased shares at an inflated price as a result of the alleged contraventions, and/or purchased shares that they otherwise would not have purchased but for the alleged contraventions. In light of the amount of lost shareholder value, the compensation sought is expected to be of very significant magnitude.
As proceedings have now been commenced, online registration for the SGH Class Action is no longer available. If you have already registered with Maurice Blackburn and executed the Retainer and Costs Agreement and the Funding Agreement, there is nothing more you need to do, and you should have received a confirmation email.
If you believe you have already registered and executed the agreements but did not receive your confirmation email, if for some reason you were unable to complete your registration, or if you have any questions about the proceedings, please contact us as soon as possible - SGH@mauriceblackburn.com.au