A shareholder class action will be filed against Brambles now that IMF Bentham has agreed to unconditionally fund the case over alleged misstatements related to the logistics company’s 2017 financial year sales and revenue forecasts.
IMF confirmed to Lawyerly that the class action will be filed after announcing Monday that it would unconditionally fund the matter.
It was not known when the case would be filed.
Slater & Gordon and IMF said in April that an investigation uncovered evidence that Brambles had misled investors about its financial predictions for 2017 and breached its continuous disclosure obligations when it failed to revise its over confident forecasts.
Maurice Blackburn is also investigating a potential shareholder case against the company over the statements. A spokesperson for the firm said it had already signed up many institutional investors.
“We have had a strong response to our investigations in this case, with a significant number of institutional investors already signing up. While IMF Bentham and Slater and Gordon play catch up, we are well progressed with our case and will have further announcements on this soon,” a spokesperson at Maurice Blackburn Lawyers said.
Investors who bought Brambles shares between August 18, 206 and February 17, 2017 might have a case against the company after corrective statements to ASX saw the company’s share price tumble, according to Slater & Gordon.
In a statement to ASX in April, Brambles said it had not received news of the Slater & Gordon case but denied any wrongdoing.
“However, Brambles strongly believes that it has at all times complied with its continuous disclosure and other regulatory obligations. Brambles therefore intends to vigorously defend any action if filed,” the company said.
The company did not respond to a request for comment on Wednesday.
Brambles predicted in mid-2016 that its profits would grow between 9 percent to 11 percent in the 2017 financial year. It also made sales growth projections of 7 percent to 9 percent.
The company made two announcements downgrading its forecast, first in late January 2017, when it revised its projected sales growth to 5 percent and its profit growth to 3 percent. On February 20 of that year it lowered its profit growth projections to 0 percent.
“Both downgrade announcements surprised the market, with the Brambles share price tumbling by 15.8 percent following the first downgrade announcement, and by a further 10 percent in the wake of the second downgrade,” Slater & Gordon said.
Maurice Blackburn announced a possible class action in October 2016.
“Our investigations raise serious questions as to whether Brambles had a reasonable basis for its initial guidance and whether it should have notified the ASX sooner that it was likely to miss that guidance,” the firm said at the time.
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