A joint ASX release by Maurice Blackburn Lawyers and the litigation funder Bentham IMF said the class action is being filed against TWE over the “late disclosure of a $190 million write-down in 2013”.
Maurice Blackburn principal Rebecca Gilsenan, who was responsible for filing the class action in the Federal Court in Sydney, said the claim “alleges TWE misled the market and breached its continuous disclosure obligations in relation to the financial impact of over-stocked US distributors”.
“This action is being brought on behalf of hundreds of TWE shareholders, who lost millions of dollars when the company revealed the full extent of the problem in July last year,” said Ms Gilsenan.
“The case will highlight the very serious responsibility listed companies have to disclose material information to the share market in order to maintain the integrity of the market and to ensure it retains its function of allocating capital in the most efficient manner possible for all those that participate in it."
Ms Gilsenan said the case will present that TWE knew or should have known by 17 August 2012 that large write-downs were inevitable and as such, the market should have been apprised of this far earlier.
“It wasn’t informed until July 2013, so shareholders unfairly paid an inflated price for the stock in the meantime,” she said.
TWE responded in an ASX statement yesterday stating it “strongly denies any and all allegations against it and will vigorously defend the legal proceeding”.
Ms Gilsenan said that despite this being the only securities class action filed in Australia in 2014 so far, it has already seen support as recently as last week from ASIC chairman Greg Medcraft.
Mr Medcraft told The Age that he sees class actions as a “good development”.
“The market decides it is something that they want to take on and if somebody is willing to fund it rather than calling on the public purse, then that to me is part of market efficiency,” said Mr Medcraft.
