Slater and Gordon and litigation funder IMF Bentham Limited (ASX: IMF) are preparing a class action against Murray Goulburn Co-operative Co. Limited (Murray Goulburn or MG) and its subsidiary MG Responsible Entity Limited (MGRE) on behalf of aggrieved unitholders in Murray Goulburn’s listed entity the MG Unit Trust (ASX: MGC).
What is the class action about?
The proposed claim relates to guidance provided in a Product Disclosure Statement (PDS) issued by MGRE on 29 May 2015, regarding MG’s likely revenue and profits from the sale of milk products during the financial year ending 30 June 2016 (FY16).
The available evidence suggests that between 29 May 2015 and 26 April 2016 (inclusive) (the Claim Period):
- MG and MGRE made representations to investors in relation to MG’s FY16 forecasts in the PDS and/or the revised forecast in February 2016, that were misleading and/or lacked a reasonable basis;
- MG and MGRE breached their continuous disclosure obligations under the ASX Listing Rules and the Corporations Act 2001 (Cth) by failing to revise their forecasts and release the information contained in the April 2016 downgrade, or any part of it, prior to 27 April 2016; and
- As a result, MG unitholders who purchased units in the 2015 capital raising or on-market at any time prior to 27 April 2016 are likely to have suffered compensable loss incurred as a result of the above alleged contraventions.
By engaging in the alleged conduct described above, we intend to allege that Murray Goulburn caused the trading of units in the MG Unit Trust at a price significantly above their “true” price during the Potential Claim Period.
Who can register to be part of the 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 at any time between 29 May 2015 and 26 April 2016, including pursuant to the initial public offer in May 2015.
Registration is now open and will close on 18 May 2018.
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.
If you wish to participate in the class action, you will need to register your claim by either completing the online registration steps on IMF’s website https://www.imf.com.au/mgc, or by requesting an Information Pack from IMF by email email@example.com or contacting 1800 016 464.
Timeline of events
On 29 May 2015, the MG Responsible Entity issued a Product Disclosure Statement (PDS) which provided a forecast to its shareholders and unit holders 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.
Further, we consider that by engaging in the alleged conduct described above, Murray Goulburn caused the trading of units in the MG Unit Trust at a price significantly above their “true” price during the Potential Claim Period.
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 by:
- Completing the online registration steps on IMF’s website ; or
- By requesting an Information Pack from IMF by email firstname.lastname@example.org or phone 1800 016 464.
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