Background
On 7 and 14 September 2009, Sigma Pharmaceuticals Limited (Sigma), as part of a rights issue through which it raised $297m of capital from retail and institutional shareholders, provided profit guidance for the full year ending 31 January 2010. The guidance provided that the market should expect modest growth with no major changes or disruptions to the business. At this time, shares were sold at around $1.02.
On 25 February 2010, Sigma announced a trading halt that lasted 5 weeks.
On 31 March 2010, Sigma emerged from its trading halt releasing its financial results for the full year ending 31 January 2010. These results disclosed:
- underlying net profit after tax (NPAT) of $67.7m (some 26.5% below market expectations);
- reported NPAT loss of $389m; and
- goodwill impairments of $424.4m.
In response to the 31 March 2010 announcement, Sigma’s share price fell to around $0.44, a fall of approximately 55%.
Proceedings issued in the Federal Court
On 29 October 2010 a representative proceeding was issued against Sigma in the Federal Court of Australia. The proceeding has been brought on behalf of individuals who:
- Purchased shares in Sigma between 7 September 2009 and 25 February 2010; and
- Have executed a litigation funding agreement with Comprehensive Legal Funding.
The Class Action alleges that:
- Sigma engaged in misleading or deceptive conduct in relation to the guidance provided on 7 and 14 September 2009 by providing guidance concerning its NPAT for the year ending 31 January 2010, without reasonable basis; and
- Sigma breached its continuous disclosure obligations by failing to inform the market of information, of which it ought to have been aware throughout the period, including the significant deterioration in Sigma’s share of the generic pharmaceuticals market to the extent that this varied from management’s expectations.
The Class Action is funded by Comprehensive Legal Funding LLC (Comprehensive).
Update of proceeding
The matter returned to court for further directions on 21 June 2011. Orders for the further conduct of the matter were made as follows:
1. The time by which the Respondent is to file and serve its Defence to the Amended Statement of Claim be extended to 1 July 2011.
2. By 15 July 2011 the Applicant deliver to the Respondent the Applicant’s proposals as to the remaining discovery to be given by the Respondent.
3. By 29 July 2011 the parties confer on the question of further discovery.
4. Any application in relation to further discovery be filed and served, together with any supporting affidavit, by 12 August 2011 and made returnable before a Registrar of the Court on a date to be fixed.
5. The directions hearing be adjourned to 9.30am on 23 September 2011.
6. Costs reserved.
Sigma have now filed and served their Defence to the Amended Statement of Claim. To view a copy of the defence please click here.
Registration Closed
Registrations for the Sigma class action have now closed. It is possible that in the future, an application will be made to include additional Registered Group Members. If you Purchased shares in Sigma between 7 September 2009 and 25 February 2010 and wish to express your interest in being added as a Registered Group Member, please contact our New Client Services department on 1800 555 777.