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GPT class action set to grow after Court sets deadline

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The number of aggrieved investors in a class action against listed real estate investment company GPT is expected to grow after the Federal Court issued a deadline for registrations.

In December last year, national law firm Slater and Gordon commenced a class action on behalf of hundreds of investors who claim they were misled by GPT Group in the lead-up to a profit downgrade on July 7, 2008.

The firm has previously stated it was representing more than 500 investors claiming more than $100 million.

However, Slater and Gordon practice group leader Ben Phi said the figures would grow after the Federal Court this month ordered GPT to contact all investors who bought shares between February 27, 2008, and July 6, 2008, informing them of an August 31 deadline to register their interest in claiming compensation.

Mr Phi said the class action had initially been commenced only on behalf of shareholders that had obtained litigation funding from Comprehensive Legal Funding LLC. However, on the instructions of the representative party, the class action had been opened to new members.

The court order means that people who purchased shares during the claim period have three months to either register for the Slater and Gordon class action or submit a form (published in today’s Australian Financial Review, Age, Sydney Morning Heraldand Australian newspapers) to opt out of the class action to preserve their legal rights against GPT.

“We strongly encourage group members to either register their claim, or opt out of the proceeding,” Mr Phi said.

“If group members do nothing, they will remain part of the class action and be bound by any result. However, they won’t be able to claim their share of compensation in the event that we are ultimately successful.”

Mr Phi said that a number of GPT shareholders had already engaged Slater and Gordon to represent them in the GPT class action and that the firm would submit registrations on their behalf.

The class action against GPT alleges that the company engaged in misleading or deceptive conduct and breached its continuous disclosure obligations in relation to and following the release of its 2007 Full Year Statutory Accounts.

On 28 February 2008, GPT released its results for the 2007 calendar year, stating earnings would be “flat” for 2008 and forecasting a 28.9 cent distribution per security. The guidance was confirmed at GPT’s Annual General Meeting on May 1, when the company’s chairman stated GPT would generate more than $600 million in net operating cash flow. On 7 July 2008, GPT released a statement to the Australian Securities Exchange (ASX) downgrading its forecast earnings for the 2008 calendar year by 27%, and its distributions per security (DPS) by 30%.

The price of GPT stapled securities fell by 24 per cent over the following two trading days.