On 23 February 2017, Slater and Gordon Lawyers and litigation funder IMF Bentham Ltd issued proceedings against Bellamy’s Australia Ltd (BAL) on behalf of persons that acquired BAL securities between 14 April 2016 and immediately prior to the commencement of a trading halt in Bellamy’s securities on 12 December 2016 inclusive.
On 27 November 2019, the parties to the class action announced that they had reached an agreement to settle the proceedings against Bellamy’s. Under the proposed agreement, Bellamy’s will pay a total of $49.7 million, inclusive of interest and costs, to settle the claims of group members in the McKay Class Action and the related proceeding, the Basil Class Action, brought against the company in 2017.
The proposed settlement was approved by Justice Beach of the Federal Court of Australia on 13 March 2020. The distribution of the Settlement Sum to registered group members in accordance with the Settlement Distribution Scheme has now been completed by the Administrator and the proceeding has now been dismissed.
Is the McKay Class Action the same as the Basil Class Action?
The claims against Bellamy’s in both class action proceedings were the same. Subject to the orders of Justice Beach of the Federal Court of Australia on 18 August 2017, both class actions were required to be advanced together and the statement of claims in the respective proceedings were aligned. The Applicant parties in both proceedings cooperated in respect of all the common steps in the litigation.
If you are a group member in the Basil Class Action and have queries regarding the proceedings, please contact the legal representatives for the Basil Applicant, Maurice Blackburn, directly.
I purchased shares in Bellamy’s between 14 April 2016 and 12 December 2016 – how do I participate in the proceeding?
Participation in the McKay Class Action and an entitlement to the now distributed Settlement Sum required eligible group members to register their claim. The Federal Court of Australia made orders on 8 December 2017 requiring group members to take steps in relation to their participation in the proceeding. Pursuant to the orders of the Court, all registrations were to be submitted before 4:00pm AEDT on 29 January 2018 (the Class Deadline). This deadline has now since passed and the Settlement Sum was distributed to eligible group members who registered in time. As a result, the proceeding has now been dismissed and no further steps are to be taken.
If you have queries regarding the distribution of the settlement fund in the McKay Class Action to you or any other queries relating to the proceeding, please contact us at 1800 071 827 or at firstname.lastname@example.org.
What are the allegations made against Bellamy’s?
The Proceeding alleged that Bellamy’s:
- contravened its obligations of continuous disclosure of price sensitive information under section 674 of the Corporations Act 2001 (Cth), by failing to keep the market informed of cases relevant to its FY17 financial performance; and,
- made statements regarding benefits arising from regulatory change in China and in relation to its future growth trajectory which amounted to misleading or deceptive conduct in contravention of section 1041H of the Corporations Act 2001 (Cth).
What is the claim about?
On 14 April 2016, Bellamy’s made an announcement to the ASX regarding recent regulatory changes announced in China, titled “Bellamy’s well placed to continue growing in China”, noting that the company believed it was “well placed to transition to the new requirements once they are known”.
On 17 May 2016, Bellamy’s released a presentation to the ASX which detailed the company’s responses to potential Chinese regulatory change and noted that it was “well positioned for potential regulatory changes in China”.
On 19 August 2016, Bellamy’s released its results for the financial year ending 30 June 2016 (FY16), noting, inter alia, that:
- it was “set to benefit from new Chinese regulations"
- it had “strong foundations to continue [its] growth strategy; and
- its EBIT margin had more than doubled between FY15 and FY16 to 22%.
On 19 October 2016, at Bellamy’s AGM, the company reiterated the messages of the 19 August 2016 releases.
The price of BAL shares fell from $12.13 to $6.85 in the trading days following a Business Update released by Bellamy’s on 2 December 2016.
A further market update released by Bellamy’s on 11 January 2017 saw the price of BAL shares fall to $5.35 on 11 January 2017, with a further decline to $4.40 on 12 January 2017.