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A class action has commenced against Nufarm Limited (Nufarm) in the Victorian District Registry of the Federal Court of Australia on behalf of investors who acquired Nufarm shares between 2 March 2010 and 31 August 2010. National law firm Slater and Gordon is acting for investors.
Slater and Gordon, Practice Group Leader, Ben Phi said the claim was lodged on Friday (January 14 2011) on the instructions of Mr Gaby Hadchiti and Mr and Mrs Graham and Susan Roney, the representative applicants in the proceeding.
In July last year Slater and Gordon was approached by shareholders and asked to start investigating potential legal action against Nufarm after the company halved its underlying net profit guidance from between $110 and $130 million to between $55 and $65 million.
“The class action filed on Friday alleges that Nufarm's profit forecast for the 2010 financial year provided on 2 March 2010 was misleading and deceptive, in that Nufarm did not have reasonable grounds to forecast underlying net profit of $110 - $130 million.
“Additionally, by failing to revise its profit guidance until 14 July 2010, it is alleged that Nufarm breached its continuous disclosure obligations.”
In mid October Slater and Gordon announced that it was expanding the investigation period to include the period to 31 August 2010 after Nufarm’s disclosure on September 1 2010 that its net debt as at 31 July 2010 was substantially higher than previously forecast.
“The class action alleges that Nufarm breached its continuous disclosure obligations by failing to disclose that its net debt was likely to be materially higher than $350 million prior to 14 July 2010,” Mr Phi said.
“It is alleged that Nufarm engaged in misleading and deceptive conduct by forecasting net debt of $450 million on 14 July 2010, when it ought to have been aware that the actual figure would be significantly higher.”
“Slater and Gordon has been engaged by significant Australian and international institutional investors, including retail and investment banks, fund managers, and super fund trustees, who are eager to recover losses on behalf of themselves and their clients,” Mr Phi said.
“We have also been engaged by mum and dad investors in both Australia and New Zealand, who have expressed disgust at the quality of Nufarm’s reporting during the claim period.”
“The support of our clients has allowed us to commence proceedings on behalf of all shareholders,” Mr Phi said.
Mr Phi said the claim was an open class action and had been commenced for the benefit of all shareholders that purchased through the relevant claim period, with the exception of any persons who have engaged another solicitor in a potential claim against Nufarm. The claim is being funded by Comprehensive Legal Funding LLC.
Slater and Gordon has set up a website portal to make it easier for investors to participate in the class action. It is the second time the firm has provided an online portal for potential class action clients. Shareholders are encouraged to register in order to receive more information about retaining Slater and Gordon to ensure their interests are represented in the class action.
Mr Phi said the law firm was still investigating a shareholder class action against Elders Limited, following the company’s profit downgrade on 22 June 2010 and a further announcement will be made in the near future.