Murray Goulburn class action
The proposed claim is open to all current and former investors who acquired units in Murray Goulburn's listed entity MG Unit Trust between 29 May 2015 and 26 April, 2016, including through the initial public offering in 2015.
Slater and Gordon Senior Associate Andrew Paull said registrations for unitholders would be open until 18 May 2018, with formal proceedings expected to be filed soon after that date subject to sufficient interest.
"Thorough analysis of the recent ACCC and ASIC inquiries into Murray Goulburn have strengthened our initial findings that suggest the company misled the market by forecasting profits it could never have achieved in the 2016 financial year," Mr Paull said.
"We have identified significant inconsistencies between Murray Goulburn's statements to the market regarding its likely revenue and profits that year and the information available to the company's management internally.
As a result, we now have increased confidence the 27 April 2016 profit downgrade was the result of an overly optimistic forecast, rather than any factors beyond its control."
The proposed claim will allege that:
- The Murray Goulburn entities misled investors by issuing the FY16 profit forecast in the PDS and/or the revised forecast in February 2016, without a reasonable basis;
- The Murray Goulburn entities are responsible for breaches of continuous disclosure obligations under the ASX Listing Rules and the Corporations Act 2001 (Cth) by failing to announce the FY16 downgrade, or any part of it, prior to 27 April 2016.
Once sufficient participants have joined the action, it will be funded by IMF Bentham and participants will not be required to pay any fees unless the class action is successful.
Unitholders who acquired units in the MG Unit Trust at any time between 29 May 2015 and 26 April 2016 and who suffered a loss as the result of acquiring those units can register their interest in the class action by visiting: https://www.imf.com.au/mgc
Murray Goulburn Timeline
On 29 May 2015, the MG Responsible Entity issued a Product Disclosure Statement (PDS) which provided a forecast to its shareholders and unitholders of a FY16 net profit after tax of $85.8 million.
On 29 February 2016, Murray Goulburn announced a revised FY16 net profit after tax forecast of approximately $63 million, citing historically weak dairy commodity prices.
On 27 April 2016, only two months before the end of the financial year, Murray Goulburn downgraded its FY16 net profit after tax forecast to $39 to $42 million. In announcing the FY16 Downgrade, Murray Goulburn blamed:
- Weak growth in Chinese demand for adult milk products in the first half of April 2016, resulting in reduced expectations for sales and revenue during the fourth quarter of FY16;
- A strengthening AUD:USD exchange rate; and
- A downward revaluation of milk product inventory expected to be sold in FY17.
On the same day, Murray Goulburn also confirmed that its CEO and Managing Director, Gary Helou, and its CFO, Brad Hingle, would resign from their respective positions.
In response to the news, Murray Goulburn Co-operative's unit price fell more than 40 per cent from its prior closing price of $2.14 on 21 April 2016 to $1.26 per unit at close of trade on 27 April 2016.